EPL acquires oil-weighted leases in shallow GoM shelf

Offshore staff

HOUSTONEPL Oil & Gas Inc. has executed a purchase and sale agreement to acquire for $70.4 million oil and natural gas assets in the shallow-water central Gulf of Mexico (GoM) from Nexen Petroleum Offshore USA Inc.

The Eugene Island 258/259 field consists of five leases (254, 255, 257, 258, and 259), all at 100% working interest. The assets are producing 900 net boe/d, about 95% of which is oil. EPL estimates 2.6 Mboe 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 that the asset retirement obligation to be assumed in the acquisition will total $27 million.

The transaction’s closing is expected in late January.

01/02/2014

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