Shell sells Gulf of Mexico properties to Apache
Posted: 5 July 2003
Shell Exploration & Production Company (SEPCo) has sold 26
mature shallow water properties in the Gulf of Mexico.
The sale has taken place through two transactions: the sale of
a volumetric production payment* to Morgan Stanley for $300 million
and the sale of the properties to Apache Corporation, subject to
preferential right elections.
The total price received for the properties is $500 million, equivalent
to some $12/ boe on a proved reserves basis. The sale, effective
July 1, 2003, was concluded in a fast and efficient process, and
builds on the earlier success of cooperation between Shell and Apache.
Included in the divestment are 15 operated and 11 non-operated
properties covering 50 Outer Continental Shelf lease blocks as well
as an interest in two onshore gas condensate separation plants that
serve the offshore fields.
The properties include 107 active wells and 17 major production
platforms and existing production handling agreements. Current net
production is 29 kboe/day of which 76% is gas.
The sale is part of the Shell Group's on-going portfolio upgrade,
averaging some $2 billion per year of divestments. Portfolio management
is a key source of value creation for Shell's business, enabling
focusing of resources in areas of highest returns.
*A volumetric production payment (VPP) provides the buyer thereof
ownership of a certain volume of oil and gas to be produced from
the properties to be delivered to the buyer of the VPP over a number
of years.
Posted by Richard Price,
Editor Pipeline Magazine
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