Energy XXI to Buy Oil Assets for $1 Billion
Energy XXI (Bermuda) Ltd. today [Nov 21] announced it will acquire certain shallow-water Gulf of Mexico shelf oil and natural gas interests from affiliates of ExxonMobil for $1.01 billion.
The assets are currently producing approximately 20,000 net BOE per day (BOE/d), about 53% of which is oil. Offshore leases included in the purchase total 130,853 net acres.
The properties are estimated to contain net proved and probable reserves of 66 million barrels of oil equivalent (BOE), 61% of which is oil. Proved reserves are estimated at 30.1 million barrels of oil and 116.1 billion cubic feet of natural gas, or a total of 49.5 million BOE, 68 percent of which are proved developed.
The properties include nine fields on the Gulf of Mexico shelf, generally located between Energy XXI’s existing core South Timbalier and Main Pass operations in water depths of 470 feet or less. The six largest fields account for 89% of the net production.
Energy XXI Chairman and CEO John Schiller said “With this acquisition, we are gaining access to production, infrastructure and extensive acreage complemented by seismic data and field studies. As operator of 94 percent of the assets being acquired, we would have a portfolio of drilling and recompletion opportunities that we can pursue while analyzing the potential for higher-impact exploration prospects.”
“In addition to growing our reserves, production volumes and drilling portfolio, we expect this consolidation of properties within our existing core area to achieve meaningful cost savings,” Executive Vice President of Exploration and Production Ben Marchive said. “Cash flow from these properties, combined with the excess cash already being generated by our existing asset base, should put us in a position to rapidly retire debt while funding accelerated development of the overall portfolio.”
