Australia's Karoon Energy to buy stakes in US offshore assets for $720 mln - Reuters
Australia's Karoon Energy to buy stakes in US offshore assets for $720 mln | Reuters
Australia's Karoon Energy to buy stakes in US offshore assets for $720 mln
Nov 16 (Reuters) - Karoon Energy (KAR.AX) announced deals worth $720 million on Thursday to buy stakes in certain offshore oil and gas fields in the Gulf of Mexico from U.S.-based LLOG Exploration, in a move to diversify operations beyond Brazil and Australia.
The oil and gas explorer said it would raise around A$480 million ($312.43 million) to fund a 30% stake purchase in the Who Dat and Dome Patrol fields in offshore Louisiana and a near 16% stake buy in the Abilene field.
Karoon Energy will issue shares under the equity-raising at A$2.05 apiece, a 14.6% discount to the stock's Tuesday close. Shares of the company were on a trading halt on Wednesday.
Macquarie Capital is acting as sole lead manager and underwriting the capital raise.
Deepwater oil and gas operation field Who Dat is expected to add around 4.0 million-4.5 million barrels of oil equivalent to Karoon Energy's 2024 total output on a net revenue interest.
LLOG, whose operations are backed by buyout giant Blackstone (BX.N) and which is one of the largest privately owned oil and gas companies in the United States, has been for long looking to sell its Gulf of Mexico oil exploration joint venture.
Karoon Energy said the Who Dat field addition would help offset a natural production decline from its Bauna offshore operations, which it had acquired from Brazil's state-controlled Petrobras in 2020.
Its oil sales jumped 66% in the September quarter to $203.9 million, while production stood around 2.85 million barrels.
The company will drawdown $274 million from a new $340 million debt facility that it has signed with a syndicate of banks including Macquarie (MQG.AX) and Deutsche Bank (DBKGn.DE) to partially fund the stake buys.
($1 = 1.5363 Australian dollars)
Reporting by Rishav Chatterjee in Bengaluru; Editing by Shilpi Majumdar and Subhranshu Sahu
Our Standards: The Thomson Reuters Trust Principles.
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.