PetroQuest Energy Inc. has eliminated a $35.4 million undiscounted abandonment liability from future obligations by releasing certain oil and gas assets in the Gulf of Mexico to Northstar Offshore Ventures LLC, Houston.
PetroQuest received no proceeds from the sale but paid $3.75 million in cash to satisfy future abandonment costs. Connected with the sale, the PetroQuest expects to receive a cash refund of $10.3 million related to a depositary account that served to collateralize a portion of the company's offshore bonds. PertoQuest now derives all production from onshore Louisiana and Texas assets.
During fourth-quarter 2017, the Outer Continental Shelf assets, consisting of seven producing fields, produced 26.1 MMcfd of gas equivalent (21% oil, 75% gas, and 4% NGL). PetroQuest estimates net production for January to be 13.8 MMcfed (24% oil, 71% gas, and 5% NGL), or 47% below the fourth-quarter 2017 rate, a result of natural declines, the company said.
Northstar, purchased by Orinoco Natural Resources LLC in August 2017 for $71 million, said the deal fits in with the company’s plan to expand through acquisition. In recent years, Orinoco’s owners, who control the Virginia Conservation Legacy Fund Inc., a nonprofit seeking sustainable approaches and public awareness about natural resource use, have acquired oil and gas and decommissioning assets.