Royal Dutch Shell plc announced it has agreed to sell its 50% working interest in the Holstein Field, comprised of Green Canyon Blocks 644, 645 and 688 in the Gulf of Mexico, to Plains Exploration & Production (PXP) for approximately $560 million, subject to closing.
Shell received an unsolicited offer from PXP for Shell’s working interest. The transaction is effective October 1, 2012 and is expected to close by year-end 2012.
Holstein is a mature deepwater asset and the sale is consistent with Shell’s continuing practice of reviewing our existing portfolio and evaluating new opportunities.
The Holstein Unit is centered on a spar platform anchored in 1350 meters (4400 feet) water depth and first produced in December 2004. Shell’s 50% interest represents about two percent of the company’s overall Gulf of Mexico net production and had a 30-day net average production of 7.4 kboe/d prior to Hurricane Isaac.
Shell retains a major Gulf of Mexico presence and is a leading deepwater producer. The company recently noted three successful appraisal wells at the Appomattox and Vito fields, which are expected to begin producing in the second half of the decade.
Stone Energy Corporation has acquired Anadarko’s 25% working interest in the five block deep water Pompano field in Mississippi Canyon, a 22% working interest in Mississippi Canyon Block 29, and a 10% working interest in portions of MC 72.
The purchase price under the agreement is $67 million in cash plus the assumption of asset retirement obligations, subject to customary closing adjustments. Current net production from the Pompano field attributable to this acquisition is approximately 1,000 barrels of oil per day and 3 million cubic feet of natural gas per day.
Stone’s estimate of proved reserves attributable to this acquisition is approximately 5.9 million barrels of oil equivalent at December 31, 2011.
In late December 2011, Stone Energy also bought BP’s 75% operated working interest in the Gulf of Mexico located field.
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NZOG (New Zealand Oil & Gas Ltd) has executed an agreement to take a 40% stake in a Tunisian concession that contains an oil field which could be brought into production as early as 2014. The Cosmos Concession in the Gulf of Hammamet, offshore Tunisia, contains the Cosmos South oil discovery. The concession was held by a joint venture comprising Storm Ventures International (80% and Operator) and Tunisia’s state-owned oil company L’Enterprise Tunisienne d’Activites Petrolieres (ETAP) (20%).
Storm is a wholly owned subsidiary of Toronto exchange-listed Chinook Energy Inc, and will reduce its share of the concession to 40% under the farm-in agreement.
A formal signing of the agreement by NZOG and Storm has been completed in Tunis.
Under the terms of the farm-in agreement, NZOG is paying a US$3m contribution to past costs, securing the right to participate and earn an interest in the development of the Cosmos concession.
A development plan is in preparation. If the development is approved through a Final Investment Decision (FID), NZOG will pay the first US$19m of Storm’s share of the development costs.
Independently evaluated proved and probable oil reserves of 6.3 million barrels have been attributed to the Cosmos South block, with additional potential from adjacent lobes. Further work on assessing the recoverable oil resource will take place ahead of FID.
The development plan is currently based on three wells, a small platform and a floating production and storage offtake vessel (“FPSO”), with initial production rates of 15,000-20,000 barrels of oil per day.
The partners intend to decide on FID in mid-2012. If the project proceeds, first oil production is anticipated in mid-2014.
NZOG CEO Andrew Knight says Cosmos is a good fit for NZOG.
“NZOG’s initial cost exposure is relatively small. If the numbers stack up we will commit to the Final Investment Decision and will be able to comfortably fund the capital commitment from our balance sheet. This is a near term, low risk development opportunity, with both production upside and exploration potential. This is a promising step forward in the expansion of our overseas interests.”