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Murphy Oil sells 50% stake in King's Quay floating production system

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Oilfield Technology,

Murphy Oil Corp. has announced that its subsidiary, Murphy Exploration & Production Company – USA, has closed the transaction with a fund managed by ArcLight Capital Partners, LLC for the sale of Murphy’s entire 50% interest in the King’s Quay floating production system (King’s Quay FPS) and associated export lateral pipelines (Associated Laterals) to be located in the Gulf of Mexico.

The King’s Quay FPS and Associated Laterals will be co-owned in a joint venture with entities managed by Ridgewood Energy Corp., including ILX Holdings III, LLC.

This transaction reimburses Murphy’s past capital expenditures of approximately US$270 million related to the King’s Quay FPS and the Associated Laterals.

Murphy intends to use the proceeds to repay borrowings under the US$1.6 billion senior unsecured credit facility, with the remainder to be held for general corporate purposes. With the previously announced pending redemption of its 2022 Notes, Murphy will have no near-term debt maturities prior to the November 2023 expiration of its revolving credit facility.

The King’s Quay FPS is more than 90% built and is scheduled to go into service in mid-2022. King’s Quay FPS is designed to process 80 000 bpd of oil and 100 million ft3/d of natural gas, and will handle the anticipated production from the Khaleesi/Mormont and Samurai fields.

“We are pleased to announce the completion of this transaction. Coupled with the receipt of necessary regulatory permits for our entire drilling campaign to begin on April 1, 2021, we remain on target for first oil in mid-2022 in the Khaleesi/Mormont and Samurai fields,” said Roger W. Jenkins, President and CEO. “By utilising the King’s Quay FPS transaction proceeds to repay our revolver borrowings, along with our recent bond issuance to extend our debt maturity profile, Murphy has a well-positioned balance sheet with ample liquidity as we enter the execution phase of this key project.”

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