Stone Energy looks to monetize Gulf of Mexico Shelf package

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.


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...