Murphy Oil announced that its wholly owned subsidiary, Murphy Exploration & 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, or LLOG. The accretive, cash flow providing Gulf of Mexico assets currently produce approximately 38,000 barrels of oil equivalent per day net and are expected to add approximately 66 million barrels of oil equivalent net of Proven reserves and 122 Mmboe of Proven and Probable reserves. The transaction will have an effective date of January 1 and is expected to close in the second quarter, subject to normal closing adjustments. Murphy will pay a cash consideration of $1.38B. Additional contingent consideration payments are based on the following: up to $200M in the event that revenue from certain properties exceeds certain contractual thresholds between 2019 and 2022; and $50M 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 $1.6B revolving credit facility. Total outstanding borrowings under the revolving credit facility, including the current balance of $325M, are expected to be fully repaid immediately following the closing of the previously announced $2.13B divestiture of Murphy's Malaysian assets. The company still intends to execute the previously announced $500M share repurchase program, expiring on December 31, 2020, of which $300M is planned in the first tranche, with the remaining $200M expected in the second tranche. The previously announced $750M debt repayment has been revised to only include the $325M 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.
