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Enterprise Oil Acquires R&B's Gulf Prospects

Enterprise Oil Acquires R&B's Gulf Prospects

Enterprise Oil, the largest independent exploration and production company in Europe, apparently couldn't resist the market opportunities in the U.S. any longer. The company paid $127.3 million last week for all of drilling company R&B Falcon Corp's E&P interests in the Gulf of Mexico. The transaction covers a 50% stake in the Boomvang field about 100 miles south of Galveston, TX, and a major stake in the Gyrafalcon prospect, which is about 100 miles offshore Lousisiana in Green Canyon block 20.

For R&B, it's an opportunity to unload E&P assets at a time when the market is at a high point. R&B's exploration efforts have been "very successful over the past year and one-half, and the...sale partially unlocks the considerable, unrecognized value we have built there," said R&B Falcon CEO Paul B. Loyd.

Enterprise's activities have been focused in three core areas in Europe, including the United Kingdom and Ireland; Norway and Denmark; and Italy. Now the company is turning its sites on the U.S. Gulf, according to Peter Jackson, president and general manager of the company's U.S. operations. The former British Gas subsidiary plans on elevating the Gulf of Mexico to core business status.

"If you have a billion barrels of reserves, you want to go somewhere and find probably more than 100 million [to establish a new core area]," said Jackson. "We're getting between 28 and 33 million barrels of reserves (about 200-350 Bcf of gas reserves) [with this purchase]. It's a significant building block." Boomvang has reserves between 70-100 million barrels of oil equivalent, 50% of which are natural gas. The field is expected to begin producing in the first half of 2002, using a Spar platform designed for daily production of 30,000 barrels of oil and 200 MMcf/d of gas.

"There have been a great number of opportunities in the Gulf in the last 18 months but that market seems to be drying up a little bit because of favorable pricing," Jackson added. He said Enterprise intends to maintain its access to four or five "top-notch exploration prospects" to drill each year or to participate in each year.

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