Karoon Energy to acquire significant stakes in Gulf of Mexico oil fields for $720m

Karoon Energy has taken a significant step in expanding its offshore operations by entering into binding arrangements to acquire a 30% interest in the Who Dat and Dome Patrol fields, located offshore Louisiana in the Gulf of Mexico. This deal, valued at US$720 million (A$1,152 million), also includes interests in the Abilene field and associated infrastructure like the Who Dat Floating Production System (FPS).

Strategic Investment Enhances Karoon’s Production Capacity

The acquisition is poised to bolster Karoon Energy’s yearly production, adding approximately 4.0 to 4.5 MMboe to its CY24 production on a Net Revenue Interest basis. This increase is expected to raise the company’s total proforma CY24 production to between 12.0 and 14.5 MMboe. Dr. Julian Fowles, Karoon’s Managing Director and CEO, highlighted the strategic importance of this transaction, noting its alignment with the company’s objectives to acquire value and earnings accretive assets with expansion opportunities.

Karoon Energy to expand portfolio with 30% interest in Who Dat and Dome Patrol fields

Who Dat and Dome Patrol: A Profile of High-Quality Assets

The Who Dat and Dome Patrol fields, operated by the experienced LLOG Exploration Offshore, are high-quality, low-cost, conventional deepwater oil and gas operations. Situated in approximately 800 meters of water, these assets have demonstrated high reliability and efficiency since their commencement in 2011. With an average uptime of 94%, these fields represent a robust addition to Karoon’s portfolio.

Funding and Future Opportunities

Karoon’s acquisition includes various interests in adjacent acreage, offering promising exploration and appraisal opportunities. The total consideration for the acquisition is funded through a mix of cash, debt, and equity, with a US$171 million cash component, US$274 million debt, and a US$300 million fully underwritten equity raise. The transaction, still subject to customary conditions, opens avenues for future infrastructure-led developments and potential expansion in the Gulf of Mexico‘s extensive infrastructure.

The acquisition not only diversifies Karoon’s geographical footprint but also complements its Brazilian operations. Karoon aims to offset natural decline from other fields with this high-margin, long-term cash flow asset. Notably, the Who Dat assets are expected to be funded from their own cash flows, emphasizing the financial viability of this acquisition.