W&T Offshore to buy Callon Petroleum assets for $100 million

Houston-based independent W&T Offshore Inc. has agreed to purchase Callon Petroleum Operating Co.’s exploration and production assets in the Gulf of Mexico for $100 million and the assumption of $6.4 million of future asset retirement obligations.

Houston-based independent W&T Offshore Inc. has agreed to purchase Callon Petroleum Operating Co.’s exploration and production assets in the Gulf of Mexico for $100 million and the assumption of $6.4 million of future asset retirement obligations.

W&T noted it will receive a 15% working interest in Medusa field in deepwater Mississippi Canyon Blocks 538 and 582, a 10% membership interest in Medusa Spar LLC—which owns a 75% interest in Medusa field’s production facilities—along with various interests in 12 non-operated Gulf of Mexico fields. The acquisition supports the company’s efforts to expand its deepwater footprint, W&T said.

Total net proved reserves to be acquired are 2.4 million boe, all of which are classified as proved developed reserves; probable reserves of 2.3 million boe; and possible reserves of 2 million boe.

September average gross production from the interests purchased in Medusa field was 7,000 boe/d, of which 88% is oil. The average net production from the remaining properties bought was 5.1 MMcfed, of which 98% is natural gas.

In 2009, W&T started oil and gas production from the Daniel Boone discovery well (OGJ Online, Oct. 28, 2009). One year later, the company’s subsidiary W&T Energy VI LLC acquired interests in six Gulf of Mexico oil and gas producing fields from Shell Offshore Inc. for $450 million and the assumption of $50 million for asset retirement obligations (OGJ Online, Nov. 11, 2010).

Also in 2010, W&T agreed to purchase Total E&P USA’s interests in three deepwater blocks in the gulf (OGJ Online, Apr. 8, 2010). In July, W&T determined a subsalt deeper pool discovery in Mahogany field on the gulf shelf was producing at rates of 3,030 b/d of oil and 5.6 MMcfd of gas from below 17,200 ft (OGJ Online, July 26, 2013).

W&T currently holds working interests in 66 offshore fields in federal and state waters, of which 59 are producing. The company currently has 1.3 million gross acres under lease, including 600,000 gross acres on the gulf shelf and 500,000 gross acres in deepwater.

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