W&T Offshore Acquires GoM Assets - Analyst Blog

W&T Offshore, Inc. WTI announced that it has acquired exploration and production properties in the deepwater of the Gulf of Mexico from Woodside Energy USA Inc. The transaction conducted via its wholly owned subsidiary, W & T Energy VI, LLC (Energy VI) included a 20% non-operated working interest in the producing Neptune Field. This includes Atwater Valley blocks 574, 575 and 618 along with an interest in the associated tension leg platform. In addition, Energy VI has acquired all of Woodside's interest in 24 deepwater exploration blocks.

The purchase price is $51 million plus the assumption of any related asset retirement obligation. The acquisition was funded from available cash on hand and the revolving credit facility.    

Total net proved reserves acquired are 1.9 million barrels of oil equivalent (100% classified as proved developed) with a PV-10 of $53 million and probable net reserves of 1.1 million barrels of oil equivalent. During Jan 2014, average daily net production from the Neptune Field was approximately 1,660 barrels of oil equivalent, of which 87% was oil.

W&T Offshore is an independent oil and natural gas producer with offshore operations in the GoM and onshore activities in the Permian Basin of West Texas and in East Texas. The company has grown through acquisitions, exploration and development, and currently holds working interest in approximately 67 offshore fields in federal and state waters (62 producing and five fields capable of producing).  

W&T Offshore currently has over 1.2 million gross acres under lease, including over 0.6 million gross acres on the Gulf of Mexico shelf, over 0.5 million gross acres in the deepwater and over 50,000 gross acres onshore in West Texas. The majority of daily production is derived from wells it operates offshore.

W&T Offshore currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.

Meanwhile, one can consider better-ranked players in the same industry like Matrix Service Company MTRX, Cameron International Corporation CAM and USA Compression Partners, LP USAC. While Matrix sports a Zacks Rank #1 (Strong Buy), Cameron and USA Compression hold a Zacks Rank #2 (Buy).