Partners block part of Maersk's Devon asset acquisition

Maersk Oil said its agreement to buy Devon Energy Production Co. LP’s interests in the Gulf of Mexico Cascade and St. Malo fields is off because partners declared preferential purchase rights in those fields.

By OGJ editors
HOUSTON, Jan. 26
-- Maersk Oil said its agreement to buy Devon Energy Production Co. LP’s interests in the Gulf of Mexico Cascade and St. Malo fields is off because partners declared preferential purchase rights in those fields.

Stakes in those two fields were part of a $1.3 billion transaction involving three fields that Devon announced last year (OGJ, Nov. 23, 2009, p. 34).

When the transaction was first announced, Maersk and Devon said the deal was subject to a waiver of preferential purchase rights by other partners in the fields. Maersk might still buy a stake in Jack field from Devon.

In a news release issued late Jan. 22, Maersk said a partner exercised its preferential rights at Cascade field, where Brazil’s state-run Petroleo Brasileiro SA (Petrobras) and Devon each own 50% interest. Maersk also said partners had exercised their rights in St. Malo field where Devon owns 25% interest. Petrobras operates Cascade field.

Raymond James & Associates analysts reported Chevron Corp. and Statoil ASA exercised their preferential rights in St. Malo field. Chevron operates St. Malo field.

A Devon spokesman on Jan. 26 told OGJ that talks continue with Maersk about its existing plans to buy Devon’s 25% interest in Jack field. Meanwhile, Maersk is in talks with Devon about possibly buying additional gulf assets from Devon that were beyond the initial three-field transaction.

Raymond James analysts issued a Jan. 26 research note suggesting that Jack field assets “could be taken by Maersk under the original agreement but may be left at the altar.”

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