Murphy Oil to acquire Gulf of Mexico assets from LLOG for $1.38bnChristian Fernsby ▼ | April 24, 2019
Murphy Oil Corporation announced today that its wholly owned subsidiary, Murphy Exploration and Production Company USA, has entered into a definitive agreement to acquire deep water Gulf of Mexico assets from LLOG Exploration Offshore, L.L.C. and LLOG Bluewater Holdings.
Acquisition Murphy will pay a cash consideration of $1.375 billion
The transaction will have an effective date of January 1, 2019 and is expected to close in the second quarter, subject to normal closing adjustments.
Murphy will pay a cash consideration of $1.375 billion.
Additional contingent consideration payments are based on the following: up to $200 million in the event that revenue from certain properties exceeds certain contractual thresholds between 2019 and 2022; and $50 million following first oil from certain development projects.
The acquisition will be funded by a combination of cash on hand and availability under the company’s $1.6 billion revolving credit facility.
Total outstanding borrowings under the revolving credit facility, including the current balance of $325 million, are expected to be fully repaid immediately following the closing of the previously announced $2.127 billion divestiture of Murphy’s Malaysian assets.
The company still intends to execute the previously announced $500 million share repurchase program, expiring on December 31, 2020, of which $300 million is planned in the first tranche, with the remaining $200 million expected in the second tranche.
The previously announced $750 million debt repayment has been revised to only include the $325 million that was drawn on the revolving credit facility as the company will no longer plan to repurchase or redeem outstanding senior notes at this time. ■