Energy XXI to Buy ExxonMobil Gulf of Mexico Assets

Energy XXI is to acquire Gulf of Mexico shelf oil and natural gas interests from ExxonMobil under a $1.01bn purchase and sale agreement.

The interests include nine fields located between Energy XXI’s existing core South Timbalier and Main Pass operations in water depths of 143m.

The shallow-water assets are producing approximately 20,000 net barrels of oil equivalent per day, of which 53% is oil.

The purchase includes offshore leases covering 130,853 net acres.

The properties are estimated to contain net proved and probable reserves of 66 million barrels of oil equivalent, of which 61% is oil.

Proved reserves are estimated at 30.1 million barrels of oil and 116.1 billion cubic feet of natural gas, or a total of 49.5 million barrels of oil equivalent, of which 68% is proved developed.

Energy XXI chairman and CEO John Schiller said that as operator of 94% of the acquired assets, the firm will pursue drilling and recompletion opportunities while analysing the potential for higher-impact exploration prospects.

The transaction is expected to be completed by 20 December 2010.