W&T Offshore sells onshore acreage to pursue GoM assets
W&T Offshore has decided to sell its Permian Basin field in west Texas to Ajax Resources, in order to use the cash and focus on offshore assets in the U.S. Gulf of Mexico.
The U.S. independent said the sale of the of all of its stake in the Yellow Rose field in the Permian Basin, would bring it gross pre-tax proceeds of around $376 million. The transaction is expected to close during the third quarter of 2015, with an effective date of January 1, 2015.
W&T Offshore’s share in its Yellow Rose field includes approximately 25,800 net acres in Andrews, Martin, Gaines, and Dawson counties in West Texas. Net production from the Yellow Rose field averaged approximately 3,000 barrels of oil equivalent per day in July.
Tracy W. Krohn, W&T Offshore’s Chairman and Chief Executive Officer, stated, “We are pleased to be monetizing our highly valued Permian Basin acreage. This sale will allow us to strengthen our balance sheet and improve our financial flexibility to pursue the acquisition of Gulf of Mexico assets while valuations are favorable. We believe that current conditions are good for W&T to identify quality offshore producing assets that offer upside exploration and development opportunity.”
W&T currently has under lease around one million gross acres offshore, including nearly six hundred thousand gross acres on the Gulf of Mexico Shelf, approximately four hundred thousand gross acres in the deepwater. The company did not take part in the recent Gulf of Mexico lease sale.
Offshore Energy Today staff