Houston-based W&T Offshore Inc. has become the operator and majority owner of the Magnolia field in the deepwater Gulf of Mexico (GOM) in a $20 million acquisition from ConocoPhillips.
W&T would have a 75% working interest in and operatorship of the field, which is in 4,700 feet of water about 180 miles south of Cameron, LA, in Garden Banks blocks 783 and 784. The company also is assuming all abandonment obligations associated with the properties.
The acquisition checked all of W&T’s boxes, considered “necessary to drive increased shareholder value from acquisitions,” said CEO Tracy W. Krohn.
“At the beginning of the year, we announced that we were looking closely at acquisition opportunities and that the current environment for acquisitions in the Gulf of Mexico was very good. We have now executed two accretive transactions in 2019. We will continue to actively pursue any opportunities that meet our criteria and are accretive to W&T."
The Magnolia field was discovered in 1999 and developed through a tension leg platform that now includes six producing wells tied back to a regional production hub at the Enchilada Platform at Garden Banks 128, about 50 miles away. The field began producing in 2004 with initial development completed in 2006.
The transaction, which increases W&T’s deepwater portfolio by an estimated 8,600 net acres, adds net proved reserves of 4.1 million boe, of which 73% are proved developed producing and 67% weighted to oil.
The assets during October produced 2,300 boe/d net to ConocoPhillips’ interest and were 82% weighted to oil. W&T said the assets also provide additional upside from pay sands in existing wellbores.
W&T has working interests in 54 producing fields in federal and state waters, and it has under lease about 837,500 gross acres, including 605,000 gross acres on the Outer Continental Shelf and 232,500 gross acres in the deepwater.