Independent oil and gas producer Stone Energy Corporation (NYSE: SGY) is selling its non-core Gulf of Mexico conventional shelf properties to Talos Energy Offshore in a deal valued at $317 million, which includes $200 million in cash and assumed future undiscounted abandonment liabilities estimated at approximately $117 million.
In a Monday announcement, Stone said these properties represent production volumes of approximately 57 MMcfe per day for the first quarter of 2014 (58% natural gas). The estimated proved reserves associated with them represented about 9 percent of Stone’s year-end 2013 estimated proved reserves. Stone will retain an option for a 50 percent working interest in the deep drilling rights on the properties.
“The sale of our non-core GOM shelf properties will allow us to further focus our efforts on GOM deep water, gulf coast deep gas and Appalachian projects, which we have targeted for our growth,” Stone Chairman, President and Chief Executive Officer David H. Welch said in a prepared announcement.
Welch said Stone's remaining conventional GOM shelf properties consist of two core operated fields producing about 6,000 barrels of oil equivalent per day (86 percent oil).
The transaction is expected to close by early August 2014.