W&T closes deal for Shell offshore field in US Gulf, nearby gas processing plant
W&T Offshore has closed its acquisition of Shell’s 64.3% interest in the Fairway Field along with a 64.3% interest in the associated Yellowhammer gas processing plant, with an effective date of September 1, 2010.
This acquisition was part of a larger transaction between Shell and W&T for three Gulf of Mexico deepwater producing fields known as Tahoe, SE Tahoe, and Droshky.
As of the close date, the adjusted purchase price paid for the Fairway Field and Yellowhammer gas plant, as adjusted on the preliminary closing statement, was approximately $36.7 million, subject to further post-effective date adjustments and assumption of asset retirement obligations associated with these properties.
The Fairway Field is located in the shallow state waters south of Mobile Bay, Alabama, and the Yellowhammer plant is located onshore in Alabama about 17 miles northwest of the Fairway Field.
Current production, net to our interest in the Fairway Field, is approximately 19.5 MMcf of natural gas per day and 1,200 bpd of natural gas liquids or approximately 26.9 MMcfe per day, which was not included in previously provided production guidance.
W&T's internal estimates of proved reserves associated with the acquired property as of June 30, 2011, are 39.4 billion cubic feet of natural gas and 2.5 million bbl of natural gas liquids, or 54.5 Bcfe.
These reserves were based on SEC reserves definitions and pricing as of June 30, 2011.
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