Contango Oil & Gas Co. completed its acquisition of ConocoPhillips Co.’s Wind River Basin asset for $67 million in cash, the Fort Worth, Texas-based company said in a release on Aug. 31.
“We feel fortunate to have been able to acquire these PDP-heavy assets at a discount to the proved producing reserve value and believe that we can further enhance the value of the assets through Contango’s track record of optimizing cash flow and reserves on acquired assets,” commented Contango CEO Wilkie S. Colyer Jr. in the release.
Contango’s acquisition of the ConocoPhillips Wind River Basin position, previously announced in early July, comprises of low decline, conventional gas assets in Wyoming. The assets had a net production run rate, as of the transaction July 1 effective date, of approximately 78 MMcfe/d—roughly 100% gas. Contango added it expects a 5% annual decline rate over the next five years.
“We continue to be on the lookout for similar, additional acquisition opportunities in this target-rich environment,” Colyer added the release on Aug. 31.
The acquisition from ConocoPhillips follows a merger agreement by Contango in June with Independence Energy LLC, built and managed by KKR’s Energy Real Assets team, to become KKR’s primary platform for pursuing upstream oil and gas opportunities. The transaction with Independence is expected to close by year-end 2021.
The independent U.S. energy producer aims to take a final investment decision on the $20 billion project in the coming months, having signed up long-term buyers for its LNG.
Power was restored the same day, but production has not yet resumed, the company said in a statement.
Images showing the Nabarima floating storage and offloading facility tilting to its side have raised concerns.