W&T completes acquisition of ExxonMobil’s Mobile Bay area assets
HOUSTON – W&T Offshore Inc. has completed the acquisition of ExxonMobil’s interests in and operatorship of oil and gas producing properties in the eastern Gulf of Mexico, offshore Alabama, and related onshore and offshore facilities and pipelines.
After considering customary closing adjustments and an effective date of Jan. 1, 2019, the company paid $167.6 million.
According to W&T, key highlights of the transaction include:
• Adds net proved reserves of approximately 74 MMboe of which 99% are proved developed producing and 22% are liquids estimated as of the effective date
• Produced about 19,800 net boe/d (25% liquids) from the acquired properties in 1Q 2019
• Includes working interests in nine GoM offshore producing fields and an onshore treatment facility that are adjacent to existing properties owned and operated by W&T
• Creates opportunities for synergies, consolidations, and cost savings as W&T will become the largest operator in the area
• Allows for potential to add incremental reserves with little or no capital by consolidating operations and extending field life
• Provides additional upside opportunities from potential future drilling locations and facility modifications.
In addition, the company was the apparent high bidder on two shallow-water blocks, Ship Shoal 332 and 367, in the Lease Sale 253 held by the Bureau of Ocean Energy Management on Aug. 21, 2019.
These two blocks cover approximately 10,300 acres and, if awarded, the company will pay about $0.3 million for the awarded leases, which reflects a 100% working interest and a royalty rate of 12.5%. The blocks have a five-year lease term and are near current W&T acreage.