Currently, the oil-weighted Gulf of Mexico assets involved in the deal produce nearly 38,000 barrels of oil equivalent per day net (Boepd). The offshore assets are expected to add about 66 million barrels of oil equivalent net (Mmboe) of proven (1P) reserves and 122 Mmboe of proven and probable (2P) reserves to the portfolio of Murphy Oil.
The acquisition is being carried out by the company through its subsidiary, Murphy Exploration & Production Company – USA.
Murphy Oil will fully own the acquired assets after the completion of the transaction. The assets will not come under MP Gulf of Mexico (MP GOM), the entity which currently holds all of its producing assets in the Gulf of Mexico.
The acquisition will boost the company’s deep water offshore presence through the addition of 26 blocks contained in the Mississippi Canyon and Green Canyon areas.
It is also expected to expand the company’s operated production in the Gulf of Mexico from 49% to 66% after excluding non-controlling interest.
According to Murphy Oil president and CEO Roger Jenkins, the newly acquired assets from LLOG will generate meaningful cash flow in the next several years to enable the company additional flexibility for future capital allocation.
Jenkins said: “Since selling our refining business and successfully spinning-out our retail gasoline business over five years ago, we have implemented significant strategic changes in revamping Murphy’s portfolio.
“Specifically, over the last few months alone we have increased our deepwater, oil-weighted, tax advantaged, Gulf of Mexico assets while we simplified our company by divesting our Malaysian portfolio, again at a very attractive price.”
Last month, the company signed a deal to offload its Malaysian assets to PTTEP HK Offshore, a subsidiary of PTT Exploration and Production (PTTEP), for $2.12bn.
Through the deal, Murphy Oil agreed to sell its stakes across five exploration and production projects – the Sabah K project, the SK309 & SK311 project, the Sabah H project, the SK405B project and the SK314A project, which are all contained in shallow and deep water off the coasts of Sarawak and Sabah.
