A Murphy Oil Corp. subsidiary has signed an agreement to divest a “non-core portion” of its operated Kaybob Duvernay assets and all of its non-operated Placid Montney assets to a private company, the company said in its Aug. 3 earnings report.
Under the purchase and sale agreement, the buyer will pay Murphy CA$150 million (US$112.3 million) at closing in an all-cash transaction, subject to customary closing adjustments and conditions.
The transaction has a March 1, 2023, effective date, with closing anticipated to occur in the third quarter of 2023.
The divested assets include the Saxon and Simonette areas of the Kaybob Duvernay, where Murphy holds a 70% working interest as operator, as well as Murphy’s 30% working interest in the Placid Montney assets operated by Athabasca Oil Corp. Also included are batteries, pipelines and the assumption of related processing and marketing contracts.
The combined assets currently produce approximately 1,700 boe/d net, 39% oil. Net proved reserves were 5.3 MMboe as of Dec. 31, 2022.
The transaction also included 138 net drilling locations across 42,000 net acres in Kaybob Duvernay and 26,000 net acres in Placid Montney.
After the transaction closes, Murphy will have approximately 488 gross drilling locations with an average 75% oil weighting remaining in the Kaybob Duvernay. Murphy’s remaining assets are operated with a 70% working interest.
Murphy will have no remaining position in the Placid Montney.
“This transaction brings forward the value of a small, non-core portion of our onshore Canadian portfolio, as we were not planning to develop these locations for many years. I look forward to progressing our capital allocation framework goals in Murphy 2.0 with the proceeds from this divestiture, and continuing to reward our supportive, long-term shareholders in the upcoming quarters,” said Roger W. Jenkins, president and CEO of Murphy.
Recommended Reading
Valaris’ 1Q Sets Positive Tone for Offshore
2024-05-06 - Coming out of first-quarter 2024, drilling contractor Valaris expects a sustained upcycle for the offshore drilling industry supported by demand growth, OPEC+ production cuts and supportive commodity prices.
Will the Ends Justify the Means for W&T Offshore?
2024-03-11 - After several acquisitions toward the end of 2023, W&T Offshore executives say the offshore E&P is poised for a bounce-back year in 2024.
Aramco Reports Second Highest Net Income for 2023
2024-03-15 - The year-on-year decline was due to lower crude oil prices and volumes sold and lower refining and chemicals margins.
Diamondback Stockholders All in for $26B Endeavor Deal
2024-04-29 - Diamondback Energy shareholders have approved the $26 billion merger with Endeavor Energy Resources.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.