HOUSTON – Noble Energy, Inc., reports that it has executed an agreement to sell its deepwater Gulf of Mexico assets to Fieldwood Energy LLC for a total value of $710 million. Noble also said that its board of directors had authorized a $750-million share repurchase program.
David L. Stover, Noble Energy’s Chairman, President and CEO, said: “While continuing to deliver outstanding performance and execution across the business, we have strategically repositioned our portfolio over the last couple of years. The sale of our Gulf of Mexico business represents the last major step in our portfolio transformation. This has been done to focus our go-forward efforts on those assets that will rapidly grow our cash flows and margins, primarily the US onshore business and the Eastern Mediterranean. I appreciate the efforts of the many employees who have contributed to our strong legacy of exploration discovery and successful resource development in the Gulf of Mexico. Going forward, we are concentrating the company’s exploration capabilities on higher-impact opportunities that can drive substantial long-term value creation.”
Cash proceeds included in the transaction total $480 million, and Fieldwood will assume all abandonment obligations associated with the properties, which Noble recorded at a book value of approximately $230 million as of Dec. 31, 2017. In addition, a cumulative contingent payment of up to $100 million is payable to Noble Energy from closing of the transaction through the end of 2022, determined quarterly at a rate of $2/bbl produced when the average Light Louisiana Sweet oil price exceeds $63/bbl.
The effective date of the transaction is Jan. 1, 2018, with closing anticipated during 2Q 2018, contingent upon Fieldwood successfully implementing its contemplated restructuring process. Included in the transaction is Noble’s interest in six producing fields and all undeveloped leases. Noble Energy estimates net production from these assets for 2018 to average slightly more than 20,000 boe/d for the year. Total proved reserves in the Gulf of Mexico as of year-end 2017 for Noble were 23 MMboe.