W&T Offshore Inc. closed on an acquisition on Dec. 12 of an oil-weighted producing property in the U.S. Gulf of Mexico (GoM), marking the second acquisition by the Houston-based company so far this year.

W&T Offshore agreed to pay ConocoPhillips Co. $20 million plus assume all associated abandonment obligations to a 75% working interest in and operatorship of the Magnolia Field, located in the central region of the deepwater GoM, offshore Louisiana. The acquisition is expected to increase W&T’s deepwater acreage by 11,500 gross (8,600 net) acres.

The transaction, funded by available cash on hand and the company revolving credit facility, follows a $200 million acquisition of GoM properties in the Mobil Bay Area offshore Alabama that W&T Offshore closed in September.

Tracy W. Krohn, W&T Offshore chairman and CEO, said the transactions adhere to a plan the company outlined as necessary to drive increased shareholder value from acquisitions.

“At the beginning of the year, we announced that we were looking closely at acquisition opportunities and that the current environment for acquisitions in the Gulf of Mexico was very good,” he said in a statement on Dec. 12. “We have now executed two accretive transactions in 2019.”

Krohn added that the company continues to actively pursue any opportunities it considers to be accretive to W&T.

Total net proved reserves to be acquired from the Dec. 12 acquisition are 4.1 million barrels of oil equivalent, of which 67% are oil and 5% NGL as of the transaction’s Oct. 1 effective date. Current reserves are proved developed and 73% of the reserves are classified as proved developed producing.

The Magnolia Field produced about 2,300 barrels of oil equivalent per day (82% oil) net to ConocoPhillips in October. 

The field is located at Garden Banks blocks 783 and 784 in approximately 4,700 ft of water about 180 miles south of Cameron, La. It was discovered in 1999 and developed through a Tension Leg Platform, which currently includes six producing wells that are tied back to a regional production hub at the Enchilada Platform at Garden Banks 128, approximately 50 miles away.  

W&T Offshore currently has working interests in 54 producing fields in federal and state waters and has under lease about 837,500 gross acres, including roughly 605,000 gross acres on the Gulf of Mexico Shelf and 232,500 gross acres in the deepwater, according to the company press release.