W&T Offshore to sell Permian assets for $376 million

HOUSTON — W&T Offshore has agreed to sell its stake in a West Texas oil field to a private equity start-up company for $376 million, the latest oil deal geared toward supporting a seller’s financial books amid cheap oil prices.

“This sale will allow us to strengthen our balance sheet and improve our financial flexibility to pursue the acquisition of Gulf of Mexico assets while valuations are favorable,” W&T Offshore Chairman and CEO Tracy Krohn said in a written statement.

The deal, expected to close in the third quarter, would hand over 25,800 net acres in the Yellow Rose field within the Permian Basin to Ajax Resources, a newly formed oil explorer. Oil and gas wells on the property, which spans four counties in West Texas, put out 3,000 barrels of oil equivalent a day in July.

Houston-based W&T has about 600,000 acres on the Gulf of Mexico shelf, a shallow-water region, and another 400,000 acres in deep-water fields in the Gulf. Krohn said cheap oil prices could allow the firm to snap up “quality offshore producing assets that offer upside exploration and development opportunity.”

In addition to building a war chest for acquisitions, W&T Offshore said it’ll use proceeds in part to pay down debt under its revolving credit facility, a type of corporate loan from which companies can borrow, pay back and borrow again.

The company is worth about $271 million on the stock market on Tuesday and has $1.47 billion in debt at the end of the second quarter. Its shares rose 5 cents in pre-market trading to $3.57 on the New York Stock Exchange.