Murphy Oil Corp. (MUR) is buying an FPSO from BW Offshore (BWO) for $125 million, the independent offshore E&P said March 12.

The BW Pioneer FPSO will remain in the Gulf of Mexico, called the Gulf of America in the U.S., at the Cascade Field (Walker Ridge 206 and 250) and Chinook Field (Walker Ridge 469 and 425). It has an approximate storage capacity of 600,000 bbl of oil and a processing capacity of 80,000 bbl/d.

As part of the acquisition agreement, BW Offshore will continue to provide operational and maintenance services for five years.

Murphy will pay $100 million upon delivery of the FPSO, which is expected by the end of first-quarter of 2025. The remaining balance will be paid out upon completion of certain contractual obligations at the end of second-quarter 2025. 

The purchase price was included in the company’s 2025 capex guidance range of $1.14 billion to $1.29 billion. Murphy’s capex for the first quarter remains at $425 million.

“By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60 million annually with a payback of about two years independent of oil price, while enhancing returns for future infield development and exploration and increasing net proved developed reserves by approximately 8 million barrels of oil equivalent,” said President and CEO Eric Hambly.

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