Karoon Energy Expands into Gulf of Mexico with $720 Million Oil & Gas Acquisition
Posted 20/11/2023 10:39
Australian oil and gas firm Karoon Energy is set to diversify its asset portfolio with binding agreements totaling $720 million. The deals will grant Karoon a 30% interest in the Who Dat and Dome Patrol oil and gas fields offshore Louisiana, along with associated infrastructure, including the Who Dat floating production system (FPS). Additionally, the company will acquire a 16% stake in the Abilene field from LLOG Exploration Offshore and LLOG Omega Holdings.
The acquisition also encompasses interests in adjacent acreage in the U.S. Gulf of Mexico, incorporating Who Dat East (40%), Who Dat West (35%), and Who Dat South (30%). These agreements mark a strategic move by Karoon to bolster its asset base and broaden its presence in the international oil and gas market.
Dr. Julian Fowles, Karoon’s Managing Director and CEO, highlighted the significance of this transformation, aligning with the company's strategic objectives to secure a substantial, value-enhancing, and producing asset. The Who Dat assets offer geographical and asset diversification, complementing Karoon's existing Brazilian business and positioning it for sustained growth.
Fowles emphasized that production from Who Dat would offset the natural decline from Baúna, contributing high-margin, long-term cash flow with a unit operating cost of less than $6 per boe in FY23. The acquisition presents significant development and exploration opportunities within the associated acreage, providing the potential for future infrastructure-led developments to increase production and extend the life of the Who Dat field.
Funding for the acquisition includes $171 million in cash, $274 million in debt, and a fully underwritten equity raise of $300 million (A$480 million). The deal is expected to increase CY24 production by 57-63%, lift 2P Reserves by 75%, and establish geographical diversification, laying the groundwork for sustained growth.
Karoon expressed confidence in the robust funding package, positioning the company to capitalize on organic growth opportunities. The completion of the transaction is subject to customary conditions.
The Who Dat conventional deepwater oil and gas development, operated by LLOG, commenced production in 2011 and is located in 800 meters of water offshore Louisiana within federal waters of the U.S. Gulf of Mexico. The active in-field development program and recent infrastructure enhancements contribute to the project's resilience and production growth.
Karoon looks forward to collaborating with LLOG, a well-respected offshore Gulf of Mexico operator, and joint venture partner Westlawn Group, marking an exciting venture into the U.S. Gulf of Mexico's oil and gas sector.