Stone Energy Corp announced a definitive agreement to sell its non-core Gulf of Mexico (GOM) conventional shelf properties to Talos Energy Offshore for $200 million in cash and assumed future undiscounted abandonment liabilities estimated at approximately $117 million. These properties represented production volumes of approximately 57 million cu ft equivalent per day for Q1 2014, at 58% natural gas. The estimated proved reserves associated with these properties represented approximately 9% of Stone’s year-end 2013 estimated proved reserves. Stone will retain an option for a 50% 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 deepwater, Gulf Coast deep gas and Appalachian projects, which we have targeted for our growth,” Stone Energy Chairman, President and CEO David H. Welch stated. “We also retained the right to drill deep gas prospects on the divested properties. Our remaining conventional GOM shelf properties will consist of two core operated fields currently producing approximately 6,000 boe per day (86% oil), which will allow us to better focus our human capital and financial capital. Together with the sale of our two onshore south Louisiana properties in late 2013 and first quarter 2014, we have sold approximately $300 million in non-core GOM shelf properties with over $140 million in future undiscounted abandonment liabilities.”
The transaction is expected to close by early August 2014, subject to customary closing conditions and adjustments.