Australia's Karoon acquires stakes in Gulf of Mexico oil, gas assets for $720mn

Australia-listed Karoon Energy has entered into agreements worth $720mn with US-based LLOG Exploration to acquire stakes in various oil and gas fields in the Gulf of Mexico, the company announced on November 16.

Under the terms of the agreements, Karoon will acquire a 30% interest in the Who Dat and Dome Patrol fields and associated infrastructure, including the Who Dat floating production system (FPS), plus about 16% interest in the Abilene field.

In addition, Karoon will acquire various interests in adjacent acreage which contains the Who Dat East (40%), Who Dat West (35%) and Who Dat South (30% interest) exploration and appraisal opportunities.

The Who Dat field is a conventional deepwater oil and gas operation located in about 800 m of water, offshore Louisiana. The assets are expected to add approximately 4 - 4.5mn barrels of oil equivalent (boe) to Karoon’s 2024 production on a net revenue interest (NRI) basis, taking the company’s total proforma 2024 production to 12 – 14.5mn boe.

The Who Dat development came onstream in 2011. Oil and gas production, which is currently 42,000 boe/day, comprising approximately 60% oil and 40% gas from nine wells, is processed through an FPS facility, and then transported to markets through common carrier pipelines.

The transaction will reduce LLOG’s interest to 45%. Westlawn Group owns the remaining 25% of Who Dat and Dome Patrol.

Karoon said it would fund the deal with $171mn in cash, $274mn in debt, and a $300mn fully underwritten equity raise.

“We are delighted to have secured a high-quality debt and equity funding package to underpin this acquisition. Following the transaction, we will have a robust balance sheet and the flexibility to deliver on our organic growth opportunities,” Karoon CEO Julian Fowles said.

The company currently has a presence in Australia and Brazil.