I wrote a few months ago about some key changes in one of the world's oldest offshore plays: the U.S. Gulf of Mexico.
There's been a changing of the guard in the Gulf lately. With producing properties held by majors being shuffled to junior companies.
One of the biggest shifts was major Gulf producer Apache selling its portfolio. To an unknown junior named Fieldwood Energy, for $3 billion.
Fieldwood was back in the news yesterday. With the upstart firm signing another massive deal in the Gulf.
The junior agreed to purchase the assets of cornerstone Gulf player SandRidge Energy. Stumping up $750 million for 57.2 million barrels of oil equivalent in proven reserves, and 25,000 barrels of oil equivalent in daily production.
This is a major deal. And carries a surprising effect: cementing Fieldwood as the largest asset owner in the Gulf of Mexico Shelf. With the company now producing 125,000 barrels of oil equivalent daily.
That's an incredible accomplishment for a company that started from scratch in mid-2013.
Of course, the firm has big backers. Namely Houston energy investment boutique Riverstone Holdings. A specialist firm that has deployed nearly $25 billion in energy projects globally.
The interesting thing is how much of that cash the firm is spending of late in the Gulf. Fieldwood is now in for some $4 billion here--making it about 15% of Riverstone's current investments.
Observers might be surprised at those numbers. Considering that the Gulf Shelf is considered a mature, over-the-hill producing area. A place where many big firms like Apache are obviously looking to exit.
But industry insiders like Riverstone see major opportunities here. One of the biggest being the application of unconventional drilling to old, but still massive Gulf oil pools. A technique that's already showing great promise in upping production and ultimate recovery rates.
Fieldwood's big buys in the Gulf show just how prospective they believe such plays might be. We'll see if the wider energy investment community starts taking notice of all the new action in an old, tired play.
Here's to coming out of nowhere,
By. Dave Forest