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Murphy Oil unit to acquire deepwater Gulf of Mexico assets for $1.38B from SNL Energy Finance Daily Murphy Oil unit to acquire deepwater Gulf of Mexico assets for $1.38B BYLINE: Jodi Shafto Murphy Oil Corp. said April 23 that subsidiary Murphy Exploration & Production Co. USA agreed to acquire deepwater Gulf of Mexico assets from LLOG Exploration Offshore LLC and LLOG Bluewater Holdings, LLC for $1.38 billion, plus additional consideration payments of up to $250 million. A contingency payment of up to $200 million will be made in the event that revenue from certain properties exceeds certain contractual thresholds between 2019 and 2022 and a $50 million payment will be made following the first oil from certain development projects. The Gulf of Mexico assets currently produce approximately 38,000 net barrels of oil equivalent per day and are expected to add approximately 66 million boe net of proven reserves and 122 million boe of proven and probable reserves. The assets will add approximately 32,000 to 35,000 net boe/d on an annualized basis to Murphy's 2019 Gulf of Mexico production, made up of approximately 60% oil. In total, Murphy's Gulf of Mexico full year 2019 production is anticipated to be approximately 85,000 net boe/d, excluding noncontrolling interest. Murphy will add 26 Gulf of Mexico blocks containing seven producing fields and four development projects with future start-ups in the Mississippi Canyon and Green Canyon areas to its deepwater offshore footprint and will expand its operated production in the Gulf of Mexico to 66% of daily production from 49%, excluding noncontrolling interest. The acquisition will be funded by a combination of cash on hand and availability under the company's $1.6 billion revolving credit facility. Total outstanding borrowings under the revolving credit facility, including the current balance of $325 million, are expected to be fully repaid immediately following the closing of the previously announced $2.13 billion divestiture of Murphy's Malaysian assets. The transaction will have an effective date of Jan. 1 and is expected to close in the second quarter, subject to normal closing adjustments. |
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