Kosmos Energy, a Dallas-based oil and gas company, has wrapped up its $1.225bn acquisition of Deep Gulf Energy (DGE), a deepwater operator in the Gulf of Mexico, from global private equity investment firm First Reserve and other shareholders.
Image: Kosmos Energy has announced the closing of its $1.2bn acquisition of Deep Gulf Energy. Photo: courtesy of num_skyman/Freedigitalphotos.net.
The stock-cum-cash deal saw Kosmos Energy pay $925m in cash and issuing $300m in its common share to the shareholders of the Houston-based Deep Gulf Energy.
Kosmos Energy, in a statement, said: “By acquiring DGE, Kosmos adds to its deepwater Atlantic Margin portfolio an established business with attractive assets and a strong record of growing production and reserves through infrastructure-led exploration.”
The Dallas firm further said that the acquisition, which is immediately accretive, will improve its scale and is anticipated to create significant free cash flow. This, it said will enable it to return cash to shareholders in the form of a dividend, starting in the first quarter of 2019.
It was in August that Kosmos Energy had signed the deal to acquire Deep Gulf Energy.
The acquisition has added 25,000 barrels of oil equivalent per day (boed) production to the Dallas firm with a projected reserves-to-production ratio of 8.8.
The company will also add estimated 2P reserves of around 80 million barrels of oil equivalent (MMboe), leading to an increase of its total 2P reserves by 40% from over 200 MMboe to nearly 280 MMboe.
The acquisition of Deep Gulf Energy also brings Kosmos Energy an experienced deepwater Gulf of Mexico management team claimed to have a track record of generating short-cycle, high-margin production.
Kosmos Energy, which operates along the Atlantic Margins, has assets in offshore Ghana, Equatorial Guinea, the US Gulf of Mexico, Mauritania and Senegal among others.
In October 2017, the company alongside Trident Energy had signed deals to acquire stake in three exploration licenses and Hess’ stake in the Ceiba field and Okume complex assets located offshore Equatorial Guinea for a sum of $650m.