W&T Offshore announced it has acquired a 75% working interest in and operatorship of the Magnolia field in the central region of the deepwater Gulf of Mexico from ConocoPhillips for $20 million.
The oil-weighted producing property, located in Garden Banks blocks 783 and 784, about 180 miles south of Cameron, La., sits in approximately 4,700 feet of water.
Total net proved reserves to be acquired are 4.1 million barrels of oil equivalent (boe), of which 67% are oil and 5% natural gas liquids. Current reserves are proved developed and 73% of the reserves are classified as proved developed producing.
The discovery was made 1999 and developed through a tension leg platform (TLP) which currently includes six producing wells that are tied back to a regional production hub at the Enchilada platform at Garden Banks 128, approximately 50 miles away.
The Magnolia field produced approximately 2,300 boe per day (boepd) (82% oil) net to ConocoPhillips in October.
W&T said there is additional upside from additional pay sands in existing well bores and potential opportunities for future drilling.
The transaction closed today is effective from October 1, 2019, and was funded from W&T's available cash on hand and revolving credit facility.
Tracy W. Krohn, W&T Chairman and Chief Executive Officer, commented, "We are pleased to announce another purchase of producing properties that meets all the criteria we have outlined in the past as necessary to drive increased shareholder value from acquisitions.
"At the beginning of the year, we announced that we were looking closely at acquisition opportunities and that the current environment for acquisitions in the Gulf of Mexico was very good. We have now executed two accretive transactions in 2019.
"We will continue to actively pursue any opportunities that meet our criteria and are accretive to W&T."
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