Murphy Oil said Tuesday it will pay up to £1.2 billion to acquire a package of deepwater Gulf of Mexico assets from Louisiana-based LLOG Exploration.
Arkansas’ Murphy Oil is betting on deepwater projects that produce more crude oil in geopolitically safe regions like the U.S. Gulf, said Chief Executive Roger Jenkins. The sale is for about £1 billion in cash with an extra £150 million paid if certain production incentives are met through 2022.
Murphy will essentially pay for the acquisition through its recently announced £1.6 billion sale of all of its Malaysian business to Thailand-based PTT Exploration and Production.
“Over the last few months alone we have increased our deepwater, oil-weighted, tax advantaged, Gulf of Mexico assets while we simplified our company by divesting our Malaysian portfolio, again at a very attractive price,” Jenkins said.
The LLOG sale includes 26 blocks in the Gulf of Mexico with seven seven operating fields that are currently producing about 38,000 barrels of oil equivalent a day. The deal also includes four development projects with future start-up dates in the Gulf’s Mississippi Canyon and Green Canyon areas.
Regionally, Murphy is a major player in both the Gulf and in South Texas’ Eagle Ford shale.
Late last year, Murphy created a joint venture with Brazil’s Petrobras in the Gulf of Mexico so Murphy could substantially increase its holdings in the deepwater region.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.