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Murphy Oil closes Gulf of Mexico joint venture

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Oilfield Technology,


Murphy Oil Corporation announced that its wholly owned subsidiary, Murphy Exploration & Production Company - USA, has closed the previously announced strategic deepwater Gulf of Mexico joint venture with Petrobras America Inc. (‘PAI’), a subsidiary of Petrobras for net cash consideration of approximately US$795 million. The transaction has an effective date of October 1, 2018.

Murphy’s net cash consideration, after adjustments provided for in the contract, of approximately US$795 million is funded by US$470 million of cash-on-hand with the remaining US$325 million being drawn on the company’s new senior credit facility.

Under the terms of the transaction, both companies contributed all their current producing Gulf of Mexico assets to the joint venture company, MP Gulf of Mexico, LLC (‘MPGOM’). MPGOM will be owned 80% by Murphy and 20% by PAI, with Murphy overseeing the operations. The company expects to account for the PAI share of this transaction as a noncontrolling interest.

Benefits of the transaction

  • Increasing total Gulf of Mexico production to approximately 60 000 net boe/d at closing, net to Murphy’s interest.
  • Providing high-margin production with Gulf Coast prices.
  • Accelerating activity in the oil-weighted Eagle Ford Shale with cash flow generated from new joint venture assets.

“We are excited to close this transformational joint venture and form a strategic partnership with Petrobras. Our newly expanded Gulf of Mexico portfolio is consistent with Murphy’s long-term vision of increasing profitable oil-weighted production in an area where we have a long history of success. We plan to allocate a portion of the cash flow generated by the joint venture to accelerate further high-value oil-weighted activity in our Eagle Ford Shale asset,” stated Roger W. Jenkins, Murphy Oil President and Chief Executive Officer.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/04122018/murphy-oil-closes-gulf-of-mexico-joint-venture/

 

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