U.S. Gulf of Mexico-focused oil and gas company W&T Offshore said Thursday it had wrapped up the acquisition of interests in eight shallow water oil and gas producing assets from an undisclosed private seller.
The offshore fields are located in the central and eastern shelf region of the Gulf of Mexico (“GOM”).
The assets include 30,646 gross acres (22,079 net acres) and are currently producing approximately 2,400 barrels of oil equivalent per day, of which 42% is oil. Estimated proved reserves as of June 1, 2023, for the eight properties totaled 3.2 million barrels of oil equivalent (49% oil) of which 100% are proved developed. In addition, the 2P reserves for the acquired properties are estimated to be 5.1 million barrels of oil equivalent (48% oil).
The assets were acquired for a gross consideration of $32 million, subject to normal and customary post-effective date purchase price adjustments. W&T used its cash on the balance sheet to pay the net purchase price.
The company said the purchase provided additional producing properties located within W&T’s existing area of operations in water depths ranging from 25 to 265 feet and high average working interest of around 72%.
Tracy W. Krohn, Chairman, President and CEO, commented, “All of the producing properties included in the acquisition announced today meet the time-tested investment criteria we have used for our prior successful acquisitions. These assets have strong production rates, are generating positive free cash flow, and have a solid base of proved developed reserves and identified upside potential with strong 2P reserves."
"We also see the opportunity to reduce operating costs to further increase free cash flow. We continue to utilize our strong cash position and expertise in acquiring complementary GOM assets to enhance the scale of W&T. Acquisitions have been a key component of how we have grown reserves and production at W&T. We believe that these properties are another great example of an acquisition that adds value for our stockholders. We remain well positioned to continue to enhance our portfolio through additional attractive opportunities that present themselves.”