Helix Energy Solutions Acquires Gulf of Mexico Leases from Murphy Oil JV

Helix Energy Solutions Group Inc. acquired offshore leases from Murphy Oil Corp. that the Houston-based company said in an Aug. 29 release bolsters its decommissioning work in the U.S. Gulf of Mexico.

“This acquisition furthers Helix’s energy transition business model by taking on decommissioning obligations in exchange for production revenues,” commented Owen Kratz, president and CEO of Helix.

Helix has earned historical success as full field abandonment contractor with decades of experience providing specialty services to the offshore energy industry worldwide, including performing over 1,600 subsea well intervention operations, according to the company’s website. 

“We continue to pursue opportunities that enable us to enhance and extend the life of existing reserves and safely perform the related decommissioning of the infrastructure, in transactions that allow producers to remove noncore assets from their balance sheets.”—Owen Kratz, Helix Energy Solutions Group Inc.

The acquisition, announced Aug. 29 and comprised of the Thunder Hawk Field leases, continues a model started by another Helix acquisition several years ago.

“We have long communicated our unique position as a qualified offshore field operator that can also assume and efficiently discharge decommissioning obligations. ... Following on from the past successful acquisition of our Droshky properties, we are excited to build upon this model with the acquired interest in the Thunder Hawk Field,” Kratz added in his statement.

Helix acquired the Droshky Prospect on Green Canyon Block 244 from Marathon Oil Corp. in January 2019. The transaction included plug and abandonment operations.

In July, Helix augmented the company’s decommissioning and life-of-field maintenance service capabilities further through the acquisition of the Alliance group of companies. Helix paid $120 million cash at closing for the Alliance acquisition.

“We continue to pursue opportunities that enable us to enhance and extend the life of existing reserves and safely perform the related decommissioning of the infrastructure, in transactions that allow producers to remove noncore assets from their balance sheets,” Kratz said on Aug. 29.

Terms of the Thunder Hawk Field acquisition weren’t disclosed. However, Murphy Oil reported in its second-quarter earnings it had agreed to divest its 50% working interest in the operated Thunder Hawk Field for about $16 million, before estimated closing adjustments.

Helix subsidiary Deepwater Abandonment Alternatives Inc. acquired the Thunder Hawk leases from MP Gulf of Mexico LLC, a joint venture (JV) controlled by Murphy Exploration & Production Co. – USA. All of MP Gulf of Mexico’s 62.5% interest in Mississippi Canyon Block 734 comprises three wells and related subsea infrastructure, collectively known as the Thunder Hawk Field.

Pursuant to the terms of the transaction, Helix receives the benefit of ownership of MP Gulf of Mexico’s interest, with a Nov. 1, 2021 effective date purchase price adjustment resulting in nominal cash paid by MP Gulf of Mexico at closing. In exchange, Helix will assume MP Gulf of Mexico’s abandonment obligations at the Thunder Hawk Field.

In addition to anticipated future production revenue, Deepwater Abandonment Alternatives will operate the Thunder Hawk Field with Helix eventually expected to perform the required plug and abandonment operations.

The Thunder Hawk Field located in Mississippi Canyon Block 734 in the Gulf of Mexico commenced production in July 2009. The field lies in over 5,700 ft of water, approximately 145 miles southeast of New Orleans.

According to a Murphy presentation in early August, the Thunder Hawk asset averages about 800 boe/d net to Murphy Oil. The company said the divestiture allows it to reduce liabilities by roughly $37 million. Closing was expected in third-quarter 2022.