Plains looks to rejuvenate BP's older Gulf fields

Houston-based oil company Plains Exploration and Production Company announced a $5.6 billion agreement to purchase assets in the Gulf of Mexico from energy giant BP this Monday, pinning the company's hopes on rejuvenating production from some of these older fields, according to MarketWatch.

BP has seen a drop in production in the Gulf since the 2010 explosion at its Deepwater Horizon oil rig, but The New York Times reports that the company still boasts 240,000 barrels per day of output from the region. The new deal would send 59,000 barrels per day of production from five mature fields to Plains.

The larger BP has expressed continued interest in offshore oil exploration along the Gulf Coast, but labeled some of its assets in the region as "low growth." Plains, on the other hand, hopes to make use of an array of new technologies that could help boost production from some of the older oil fields.

"Significant upside production potential exists in the currently producing reservoirs through numerous low-risk, high-margin drilling/recompletion and well workover opportunities," the company said.

Outlooks for offshore oil in the Gulf of Mexico are available at PennEnergy's Research area.

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