W&T Offshore Completes Acquisition of Producing Properties in Gulf of Mexico and Named Apparent High Bidder on Two Blocks in ...
September 03 2019 - 6:45AM
W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”)
announced today that it has closed the previously-announced
purchase of ExxonMobil Corporation’s ("ExxonMobil") interests in
and operatorship of oil and gas producing properties in the
eastern region of the Gulf of Mexico (“GOM”), offshore Alabama, and
related onshore and offshore facilities and pipelines. After
taking into account customary closing adjustments and an effective
date of January 1, 2019, cash consideration paid by W&T was
$167.6 million which includes a previously-funded $10 million
deposit. The acquisition was funded by cash on hand and
borrowings on its previously-undrawn revolving bank credit
facility; W&T will also assume asset retirement obligations
associated with these assets.
Key highlights of the ExxonMobil transaction
include:
- Adds net proved reserves of approximately 74 million barrels of
oil equivalent (“Boe”) of which 99% are proved developed producing
and 22% are liquids estimated as of the effective date
- Produced approximately 19,800 net Boe per day (25% liquids)
from the acquired properties in the first quarter of 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 significant 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 announced it is the
apparent high bidder on two shallow water blocks in the GOM Outer
Continental Shelf (OCS) Region-wide Oil and Gas Lease Sale 253 held
by the Bureau of Ocean Energy Management ("BOEM") on August 21,
2019.
Tracy W. Krohn, Chairman and Chief Executive
Officer, stated, "We are pleased to have closed our purchase of
free cash flow positive, producing properties in the GOM from
ExxonMobil exactly as scheduled. These low-decline assets add
significant reserves and production to our portfolio and are
adjacent to our current operations. This provides us the
opportunity to recognize increased scale, rationalize operations
and capture cost efficiencies to further grow cash flow. In
addition, we remain active in seeking other new GOM opportunities
through our participation in the BOEM lease sale earlier this month
where we were named apparent high bidders on two shallow water
blocks. We will continue to focus on maximizing value through
accretive acquisitions, organic growth and operational excellence.
We have a premier portfolio of both shallow water and deepwater
properties that generate a solid and consistent source of cash flow
with significant upside that will be further enhanced by this
acquisition.”
GOM Lease Sale 253
W&T is the apparent high bidder on two
shallow water blocks, Ship Shoal 332 and 367. These two
blocks cover approximately 10,300 acres and, if awarded, the
Company will pay approximately $0.3 million for the awarded leases,
which reflects a 100% working interest in the acreage and a royalty
rate of 12.5%. The blocks have a five-year lease term and are
in close proximity to current W&T acreage.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and
natural gas producer with operations offshore in the Gulf of Mexico
and has grown through acquisitions, exploration and
development. The Company currently has working interests in
47 producing fields in federal and state waters and has under lease
approximately 818,000 gross acres in the Gulf of Mexico, including
approximately 598,000 gross acres on the conventional shelf and
approximately 220,000 gross acres in the deepwater. A
majority of the Company’s daily production is derived from wells it
operates. For more information on W&T, please visit the
Company’s website at www.wtoffshore.com.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements reflect our
current views with respect to future events, based on what we
believe are reasonable assumptions. No assurance can be given,
however, that these events will occur. These statements are subject
to risks and uncertainties that could cause actual results to
differ materially including, among other things, market conditions,
oil and gas price volatility, uncertainties inherent in oil and gas
production operations and estimating reserves, unexpected future
capital expenditures, competition, the success of our risk
management activities, governmental regulations, uncertainties and
other factors discussed in W&T Offshore’s Annual Report on Form
10-K for the year ended December 31, 2018 and subsequent Form 10-Q
reports found at www.sec.gov or at our website at
www.wtoffshore.com under the Investor Relations section. Investors
are urged to consider closely the disclosures and risk factors in
these reports.
CONTACT:
Al PetrieInvestor Relations
Coordinatorapetrie@wtoffshore.com713-297-8024
Janet YangEVP &
CFOinvestorrelations@wtoffshore.com713-624-7326
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