Firm to buy ExxonMobil gulf shelf properties

By OGJ editors
HOUSTON, Nov. 22
– Energy XXI (Bermuda) Ltd., Houston, will buy Gulf of Mexico shelf assets from ExxonMobil Corp. for $1.01 billion in a deal that makes the purchaser the third largest shelf oil producer.

The nine fields being acquired, generally between Energy XXI’s core South Timbalier and Main Pass operations in 470 ft of water or less, are producing a net 20,000 b/d of oil equivalent, 53% oil. The six largest fields have 89% of the production.

Energy XXI will operate 94% of the acquired properties. The purchase includes 130,853 net acres of offshore leases.

Reserves being acquired are 30.1 million bbl of oil and 116.1 bcf of gas, 68% proved developed, or a 65% reserves boost for Energy XXI.

The purchase is subject to preferential rights-to-purchase held by other working interest owners in the properties and to customary closing conditions and adjustments. The effective date is Dec. 1, 2010, with closing expected by Dec. 20, 2010.

Energy XXI listed $414 million in future development costs associated with the properties, including $313 million associated with proved reserves.

The six main fields being acquired are South Timbalier 54, West Delta 30 and 73, Grand Isle 43 and 16, and South Pass 89.

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