Ophir exits exploration block offshore Mexico despite discovery

Ophir Energy has signed a sales and purchase agreement relating to the sale of its 23.33% interest in Block 5 (Cuenca Salina), offshore Mexico, to the existing partners in the block.

The partnership includes subsidiaries of Murphy Oil Corporation as the operator and Wintershall Dea and Petronas.

Ophir said on Thursday that, upon closing, interest in the license will be held by Murphy Sur, S. de R.L de C.V at 40% (operator), Sierra Offshore Exploration, S. de R.L. de C.V. at 30% and PC Carigali Mexico Operations, S.A. de C.V. at 30%.

The sale is for a cash consideration of $35 million, which accounts for back costs (including its share of the recent well) alongside a cash premium. The proceeds will be used to enhance liquidity.

The gross book value of the asset being sold is $24 million. The sale is expected to close before the end of the year and is subject to government and regulatory approval under the Block 5 exploration license.

According to Ophir, this transaction is consistent with its stated strategy of minimizing its exposure to exploration.

Ophir revealed it was in talks to sell its interest in the Block 5 back in March 2019 despite an announcement of the discovery made on the block with the Cholula-1 well. The well was drilled during February and March 2019 and it encountered oil and gas.

It is worth reminding that Indonesia’s Medco is expected to close its previously announced acquisition of Ophir on Friday, May 17.

Offshore Energy Today Staff

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