2010-07-09-2010-07-09-2010-07-09

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Sellers
Buyers
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Description

Acquired Gulf shelf properties, adding 4,500 BOE/D (60% oil) of production.

In the first transaction in the Gulf of Mexico since the oil spill in April and the subsequent drilling moratorium, Matt McCarroll's Dynamic Offshore Resources LLC, Houston, has acquired properties on the Gulf shelf from privately held Samson Investment Co., Tulsa, Okla., for an undisclosed price.

Dynamic Offshore chief executive McCarroll says the acquisition reflects the company's continued commitment to the Gulf of Mexico. "The growth that Dynamic has exhibited since its inception two and a half years ago is a result of the unique value-building opportunity that continues to exist as companies make the strategic decision to exit the shelf or to divest assets in the Gulf."

The assets include 22,000 net acres in 16 federal and state blocks involving eight fields, the most prominent being a 100% interest in Vermillion Block 272 and a 50% interest in High Island Block 52. Current net production from the properties is approximately 4,500 BOE per day (60% oil). Dynamic will operate more than 67% of the acquired reserves.

The acquisition includes 32 active wells, 36 inactive wells, six platforms and two caissons in 30 to 175 feet of water.

The assets were marketed by BMO Capital Markets and included 27 federal and state blocks and 38,248 net acres (61% held by production; 74% operated). Total proved reserves in the divestment package were 6 million barrels of oil equivalent (3.18 million barrels of oil; 16.8 million cubic feet of gas), with 6.9 million barrels equivalent proved, probable and possible. Net average cash flow for fourth-quarter 2009 was $7 million per month.

The divestment represented a complete exit of the region for Samson.

"In this environment, Dynamic has been able to purchase high cash flow, producing properties at valuations not conditioned on drilling new wells," McCarroll adds. "In addition, in each of our six acquisitions to date, we have been able to identify attractive drilling opportunities that provide us with significant upside."

Dynamic Offshore was formed in January 2008 with a $450-million equity contribution from Riverstone Holdings LLC. In October, Dynamic acquired Gulf of Mexico-focused Beryl Oil and Gas LP, Houston.