Houston firm expands Gulf of Mexico holdings with $750M deal

HOUSTON — On the heels of closing a multibillion-dollar deal for a stake in the Gulf of Mexico, Houston-based Fieldwood Energy is amassing more reserves in the largest U.S. offshore oil and gas region.

The private equity-backed company said Tuesday it plans to pay $750 million in cash for SandRidge Energy’s Gulf Coast and Gulf of Mexico unit, adding 150 blocks in the shallow waters of the Gulf to the 500 blocks it bought late last year. The deal, expected to close in the first quarter, also includes onshore Gulf assets and a position in a deep-water field.

The acreage houses 57.2 million barrels of oil equivalent in proved reserves and has a daily production of 25,000 barrels per day. Fifty-one percent of the proved reserves are oil, and the assets give Fieldwood more drilling prospects, as well.

For Fieldwood President and CEO Matt McCarroll, the Gulf assets are familiar territory. Two years ago, McCarroll sold Dynamic Offshore — a Houston company that had owned much of the same Gulf acreage at play in Tuesday’s deal — to SandRidge for $1.3 billion.

“It’s essentially the same company,” McCarroll said in an interview with FuelFix Tuesday.

McCarroll’s outlook: Private equity firm has big plans for Apache Gulf assets

The deal comes three months after Fieldwood, backed by $27 billion private equity firm Riverstone Holdings, paid $3.75 billion to buy Houston-based Apache Corp.’s footprint in the shallow waters of the Gulf of Mexico in one of the largest U.S. energy deals in 2013. McCarroll said the Apache deal made Fieldwood the largest operator in the Gulf of Mexico Shelf.

The latest acquisition would bring Fieldwood’s daily production in the Gulf to 125,000 barrels of oil equivalent, of which 54 percent is oil.  The company has grown from a start-up of 12 employees in July last year to more than 220 in Houston, with another 100 employees in Lafayette, La. and 350 offshore workers, McCarroll said.

As for the future, Fieldwood and its private equity backer are keeping their options open: The company has not yet decided whether to go public, sell itself or merge with another company in coming years, but it’s “not in a hurry,”  McCarroll said.

Oklahoma-based SandRidge said it would use proceeds from the deal to fuel growth in its North American onshore business, boosting plans to spend $1.5 billion to develop oil and gas production next year. In the Gulf deal, SandRidge would retain a 2 percent royalty interest in two exploration projects.

SandRidge shares closed down 1.5 percent to $5.74 Tuesday on the New York Stock Exchange.


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