Kosmos Buys Gulf of Mexico Deepwater Oil Rigs

Kosmos Buys Gulf of Mexico Deepwater Oil Rigs

Fair Lifts News

Kosmos makes a big splash with purchase of major Gulf of Mexico oil rigs

Kosmos recently announced the purchase of Deep Gulf Energy in the Gulf of Mexico for $1.225 billion. The purchase is subject to regulatory approval and closing conditions, but Kosmos expects the deal to be finalized in September.

The purchase allows Kosmos to immediately launch into deepwater oil production in the Gulf of Mexico, utilizing a series of existing rigs from Deep Gulf Energy (and its affiliates), which ran one of the largest deepwater oil production operations in the Gulf.

Prior to the purchase, Kosmos had deepwater operations primarily off Africa and South America. Pending sale approval, it will be in the United States as well.

Immediate Production Increase

Kosmos Chairman and Chief Executive Officer Andrew G. Inglis said in a statement he expects this will allow the company to nearly double oil production over the next four years, and he believes the time is right to enter the deepwater market.

Kosmos Buys Gulf of Mexico Deepwater Oil Rigs

Kosmos Buys Gulf of Mexico Deepwater Oil Rigs

With many competitors leaving the Gulf of Mexico to chase onshore shale plays, a huge opportunity has opened in the basin,” Inglis stated. “The best deepwater assets can compete with the best shale, and now is a good time to enter the Gulf of Mexico.”

With the acquisition, Kosmos expects to increase its daily worldwide production from roughly 45,000 boe (barrel of oil equivalent) to nearly 70,000 boe. Additionally, the deal includes roughly 80 million boe in reserves as well as the experienced Deep Gulf Energy management team.

Kosmos purchased Deep Gulf Energy, Deep Gulf Energy II LLC, and Deep Gulf Energy III LLC for a reported $925 million in cash and $300 million in common shares from Connecticut-based First Reserve, which founded the company 13 years ago.

In a press release, Kosmos said the deal should enable the company to free up cash to pay its shareholders dividends in 2019.

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