Murphy Exploration & Production Co.-USA, a wholly owned subsidiary of Murphy Oil Corp., El Dorado, Ark., and Petrobras America Inc. (PAI) have formed a joint venture comprised of all the current producing Gulf of Mexico assets from Murphy and PAI. Murphy, which will oversee operations, will own 80% of the combine and PAI will own 20%.
The deal adds 41,000 net boe/d to Murphy’s gulf production, 97% of which is oil. Post-closing, total Murphy gulf production is expected to be 60,000 net boe/d. The company’s corporate oil-weighted production is expected to increase to 61%.
The combine excludes exploration blocks from both companies, except for PAI’s blocks that hold deep exploration rights.
Murphy will pay $900 million to PAI, and PAI will earn an additional consideration up to $150 million if certain price and production thresholds are exceeded beginning in 2019 through 2025. Murphy also will carry $50 million of PAI costs in St. Malo field if certain enhanced oil recovery projects are undertaken.
The deal is expected to close by yearend.