What a Life for June 27, 2007
June 26, 2007Ellis Lottinger, Jr.
June 28, 2007(AP)Independent petroleum producer McMoRan Exploration Co. agreed Thursday to pay Newfield Exploration Co. $1.1 billion for all of Newfield’s producing properties in the shallow waters of the Gulf of Mexico.
New Orleans-based McMoRan said the deal would give it a portfolio of properties with significant production of oil and natural gas, while providing increased cash flow. Houston-based Newfield said the agreement was part of its strategy to concentrate on a longer-lived reserve base.
As part of the deal, McMoRan assumed liabilities associated with the future abandonment of wells and platforms and received future exploration rights for the properties, which include 125 fields on 146 offshore blocks that current produce about 270 million cubic feet of natural gas equivalents daily.
McMoRan said proven reserves are estimated to be 327 billion cubic feet of natural gas equivalents. About 70 percent of the reserves consist of natural gas, the company said
“This acquisition is a strategic fit for McMoRan,” McMoRan co-chairmen James Moffett and Richard Adkerson said in a joint statement. “It is financially compelling, provides significant cash flows and offers substantial exploration and exploitation.”
McMoRan said it would retain technical and operating personnel and contractors that have worked for Newfield.
“McMoRan has acquired some very good properties in this transaction,” said Newfield chief executive officer David Trice.
Newfield also plans to sell its properties in Bohai Bay, China and the North Sea, along with some properties in Texas and Oklahoma. Trice said Newfield would concentrate on deepwater petroleum development in the Gulf of Mexico.
McMoRan also said the deal included a 50 percent interest in Newfield’s nonproducing leases in the shallow waters of the Gulf and an undisclosed interest in leases associated with Newfield’s inventory of ultra-deepwater projects in the Gulf.
