EPL Oil & Gas executed a purchase and sale agreement to acquire oil and natural gas assets in the shallow-water central Gulf of Mexico (GoM) from Nexen Petroleum Offshore U.S.A. for USD 70.4M.
The Eugene Island 258/259 field consists of five leases, namely 254, 255, 257, 258 and 259, all at 100% working interest. The assets are currently producing approximately 900 net barrels of oil equivalent (Boe) per day, about 95% of which is oil. EPL estimates that the proved reserves consists of approximately 2.6M Boe of proved developed producing reserves, about 91% of which is oil. The field areas exhibit shallow decline and EPL has identified upside potential beyond the current proved reserves. The company also estimates the asset retirement obligation to be assumed in the acquisition is expected to total approximately USD 27M.
Gary Hanna, EPL’s President and CEO commented, “This purchase adds another layer of long-lived oil production to our current asset base and additional upside. It dovetails nicely into our commitment to acquire new 3D datasets. A new Full Azimuth Nodal dataset is currently being shot covering these field areas, and we expect to have the data in house during the second half of 2014. “