W&T Offshore, a Texas-based oil and gas company, has agreed to sell its ownership in overriding royalty interests in the Permian Basin for $56.8m to an undisclosed buyer.
The transaction, subject to customary closing conditions and adjustments, is expected to close on or before October 1, 2018.
The Company also announced that it has successfully drilled an exploration well from the South Timbalier 311 platform that is part of the Ewing Bank 910 field.
The ST 320 A-2 exploratory well has reached total depth and is being prepared for completion.
The Company logged approximately 163 feet of net hydrocarbon, which exceeds pre-drill estimates. W&T expects to have the well on production via existing infrastructure before year-end 2018.
Following the completion of the ST 320 A-2 well, the rig will spud the ST 320 A-3 well, another low-risk exploration opportunity in the Ewing Bank 910 field.
Stratigraphic information from a high quality thick Miocene sand that was penetrated up-hole in the ST 320 A-2 well has lowered the perceived risk on the ST 320 A-3 oil prospect.
Both of these wells in the Ewing Bank 910 field are part of a drilling joint venture program established by W&T and private investors in 2018 (“JV Drilling Program”). Prior to inclusion of these wells in the JV Drilling Program, W&T’s working interest in these wells were 36%.
As a result of the JV Drilling Program and other promoted working interests at the ST 320 A-2 well, W&T is expected to contribute 4.8% of the total capital expenditures and will receive 10.8% of the net revenues less expenses until certain thresholds are met, at which time W&T’s effective interest in this well will increase to 13.8%.
W&T Offshore chairman and CEO Tracy Krohn said: “The divestiture of our non-core, non-operated onshore asset will enhance our already strong cash position as we optimize our balance sheet for future growth.
“We are continuing to have excellent drilling success in the Gulf of Mexico and delivering solid results for our JV Drilling Program. The ST 320 A-2 well success further supports our plan to execute and bring forward our high-quality prospect inventory.”
Source: Company Press Release