McMoRan to buy certain gulf assets from Newfield

McMoRan Exploration agreed to buy all of Newfield Exploration's producing properties in the shallow-water Gulf of Mexico for $1.1 billion and the assumption of liabilities associated with future abandonment of wells and platforms.

By OGJ editors
HOUSTON, June 21 -- McMoRan Exploration Co. agreed to buy all of Newfield Exploration Co.'s producing properties in the shallow-water Gulf of Mexico for $1.1 billion and the assumption of liabilities associated with future abandonment of wells and platforms. The sale is expected to close in July.

This transaction also provides McMoRan, New Orleans, with interest in Newfield's ultradeep-shelf acreage in its Treasure Island and Treasure Bay exploration program. Newfield will retain a 10-25% working interest in the Treasure Island and Treasure Bay acreage, which encompasses 85 lease blocks.

David A. Trice, Newfield chairman, president, and chief executive officer, said the sale is the first in a series of planned divestitures that also include assets in China's Bohai Bay, the North Sea, and Texas and Oklahoma.

Newfield, Houston, will continue to focus on growing its deepwater portfolio in the gulf, Trice said. Newfield also will continue to explore and drill shelf prospects, he said.

Current net production from the properties being sold is 270 MMcfd of gas equivalent. Newfield's net production from its shelf properties in the first half of this year is expected to be 46 bcf.

Upon closing, McMoRan will assume operatorship of the Treasure Island lease. In addition, McMoRan will join Newfield in a 50-50 joint venture on Newfield's shelf primary-term lease acreage. This venture will cover 19 blocks, or nearly 100,000 gross acres.

Treasure Island is believed to have potential for several trillion cubic feet of recoverable gas in Miocene and older sections.

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