Houston-based oil and gas producer W&T Offshore has wrapped up the acquisition of working interests in eight shallow water oil and gas-producing assets in the central and eastern shelf region of the Gulf of Mexico (GOM) for a gross consideration of $32 million from an undisclosed private company.
According to W&T Offshore, this acquisition has a closing date of September 20, 2023, and an effective date of June 1, 2023. The company used its cash on the balance sheet to pay the net purchase price. The acquisition includes estimated production as of September 12, 2023, of approximately 2,400 barrels of oil equivalent per day (42% oil) with around two-thirds of the production being operated.
With a high average working interest of around 72%, these eight assets provide access to additional producing properties located within the firm’s existing area of operations in water depths ranging from 25 to 265 feet.
Tracy W. Krohn , W&T’s Chairman, President and CEO, commented: “All of the producing properties included in the acquisition announced today meet the time-tested investment criteria we have used for our prior successful acquisitions. These assets have strong production rates, are generating positive free cash flow, and have a solid base of proved developed reserves and identified upside potential with strong 2P reserves. We also see the opportunity to reduce operating costs to further increase free cash flow.
“We continue to utilize our strong cash position and expertise in acquiring complementary GOM assets to enhance the scale of W&T. Acquisitions have been a key component of how we have grown reserves and production at W&T. We believe that these properties are another great example of an acquisition that adds value for our stockholders.”
These new assets, which include 30,646 gross acres (22,079 net acres), come with estimated proved reserves as of June 1, 2023, totaling 3.2 million barrels of oil equivalent (49% oil) of which 100% are proved developed. In addition, the 2P reserves for the acquired properties are estimated to be 5.1 million barrels of oil equivalent (48% oil).
W&T Offshore was the apparent high bidder on two shallow water blocks in the Gulf of Mexico lease sale held by the Bureau of Ocean Energy Management (BOEM) at the end of March 2023 .