Major opportunities exist in the deepwater US Gulf of Mexico, which provides attractive rates of return and will remain attractive in the future, according to one independent which has just invested more than US $1 billion expanding its position there, as well as committing more cash to a new rig deal.
Defining its outlook on the GoM, Freeport McMoRan sees plenty of scope for cash generation going forward with attractive economics. Speaking at Deutsche Bank’s 5th annual global industrial and basic materials conference earlier this month, Kathleen Quirke, executive vice president and CFO, talked about the company’s ambitions in the area.
“The growth as you look at the next several years is going to be in the US Gulf of Mexico deepwater,” Quirke told a financially-focused audience.
She referred to Plains Exploration & Production, which combined with Freeport-McMoRan Copper and Gold, and McMoRan Exploration, in a three-way asset transaction worth US $19 billion that closed in May and June last year. Together they created a single US natural resources company, Freeport-McMoRan Oil & Gas, which now has deepwater assets in the US Gulf, California and in the onshore Eagle Ford shale play.
“PXP had acquired some facilities from BP and Shell before our deal closed,” Quirke said, after Freeport-McMoRan last month spent a further $1.4 billion buying up deepwater assets held by Apache Corporation in the GoM, including equity in Anadarko’s Lucius and Heidelberg fields. “These assets have very significant capacity and what our focus is going to be is to fill up that infrastructure. That is a business where we have a lot of opportunity to bring on new production at very attractive economics,” Quirke said.
“This is a solid business with big facilities,” she continued, referring to Freeport McMoRan’s existing deep Gulf assets at Holstein, Marlin and Horn Mountain, adding: “We can tie back infrastructure into those facilities at very attractive cost.”
Quirke added that she saw a “lot of impactful growth for the company”.
Just recently Freeport-McMoRan committed another $425 million to contract a newbuild rig for Gulf exploration (see related story, page 3).
Recommended Reading
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-26 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.
US Drillers Cut Most Oil Rigs in a Week Since November
2024-04-26 - The number of oil rigs fell by five to 506 this week, while gas rigs fell by one to 105, their lowest since December 2021.
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish
2024-04-25 - Henry Hub blues: CNX Resources and other Appalachia producers are slashing production and deferring well completions as natural gas spot prices hover near record lows.
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.