Lafayette, LA-based Stone Energy Corp. (NYSE: SGY) has retained an advisor to market and sell all of its Gulf of Mexico Shelf, state waters, and onshore South Louisiana properties, according to an 8-K filed with the SEC July 24.
The asset package, according to estimates by Global Hunter Securities, is made up of roughly 25% of total corporate production, or just short of 10 Mboepd, and 12% of year-end 2012 estimated 124 MMboe of proved reserves.
In a research report this morning, analysts at Global Hunter Securities noted that the divestiture — not expected to include Stone’s deep gas asset interests in La Cantera or its interests in the La Montana or Thunder Bayou prospects — makes sense.
“Based on recent metrics, we estimate that this sale could generate proceeds of ~$300MM, using the metrics from sales for recent natural-gas weighted assets. Stone exited Q1:13 in excellent financial position with $261.4MM of cash on its balance sheet and a 36% net debt-to-capital ratio. Given the overhang of a property package that was unlikely to receive any growth capital any time soon with daunting decline rates, P&A liabilities and other distractions, potentially redeploying $300MM into the company's soon-to-be-initiated deepwater GoM exploration program makes economic and strategic sense,” said the analysts.
The announcement marks at least the fourth package of primarily Shelf properties marketed by a public E&P company in 2013, noted the analysts, citing Apache’s recent sale of GoM Shelf properties to private equity-backed Fieldwood for $3.75 billion.