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Equinor to acquire Shell's Gulf of Mexico assets
Equinor has exercised its preferential rights over Delek Group to acquire an additional 22.45% interest in the Caesar-Tonga oil field from Shell, for $965mn in cash. This will increase Equinor’s interest from 23.55% to 46.%. Anadarko remains the operator, holding a 33.75% stake, with Chevron retaining its 20.25% interest.
Shell had previously agreed to sell the Caesar-Tonga assets to Delek Group, also for $965mn. That deal was conditional upon other interest-holders agreeing not to buy the stake.
Commenting on the deal, Michael Murphy, Research Analyst with Wood Mackenzie's Gulf of Mexico team, says: ‘This provides Equinor with a great opportunity to increase working interest in an asset it already knows well. The move increases Equinor's US Gulf of Mexico 2019 net forecasted production by almost 15%, to over 100,000 boe/d. The project will add near-term cash flow to Equinor's regional portfolio, and with operator Anadarko set to be acquired by Occidental, it could also position the company to seek operatorship of the subsea tie-back field in the future.’
He adds: ‘Our initial analysis indicated that Delek achieved an attractive deal valuation – this is further proof that the US Gulf of Mexico is still a buyer's market.’
