HOUSTON, Oct. 17, 2013 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) announced today that it has entered into an agreement with Callon Petroleum Operating Company ("Callon") to acquire substantially all of Callon's exploration and production properties in the Gulf of Mexico. The transaction includes a 15% working interest in the Medusa field (deepwater Mississippi Canyon blocks 538 and 582), a 10% membership interest in Medusa Spar LLC (which owns a 75% interest in the Medusa field's production facilities) and various interests in 12 non-operated Gulf of Mexico fields. The purchase price is $100 million (subject to customary post-effective date adjustments) and the assumption of $6.4 million of future asset retirement obligations. The effective date is July 1, 2013, and the transaction is expected to close on or about November 30, 2013. The acquisition will be funded from W&T's available cash on hand and revolving credit facility.
Total net proved reserves to be acquired are 2.4 million barrels of oil equivalent, all of which are classified as proved developed reserves; probable reserves of 2.3 million barrels of oil equivalent; and possible reserves of 2 million barrels of oil equivalent. These reserves were determined by Netherland, Sewell and Associates, Inc., as of July 1, 2013, based on SEC reserves definitions and recent NYMEX pricing. During September, average gross daily production from the interests being acquired in the Medusa field was approximately 7,000 barrels of oil equivalent (1,050 barrels of oil equivalent net), of which 88% is oil; and the average net daily production from the remaining properties being acquired was approximately 5.1 million cubic feet of natural gas equivalent, of which 98% is natural gas.
Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "We are pleased to add yet another quality deepwater field to our growing portfolio. The addition of reserves, production and infrastructure from this acquisition, coupled with the significant exploration opportunities in addition to our 3P reserve estimates, supports our ongoing efforts to expand the deepwater footprint of the company."
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and onshore in both the Permian Basin of West Texas and in East Texas. We have grown through acquisitions, exploration and development and currently hold working interests in approximately 66 offshore fields in federal and state waters (59 producing and seven fields capable of producing). W&T currently has under lease approximately 1.3 million gross acres, including approximately 0.6 million gross acres on the Gulf of Mexico Shelf, approximately 0.5 million gross acres in the deepwater and approximately 0.2 million gross acres onshore in Texas. A substantial majority of our daily production is derived from wells we operate offshore. For more information on W&T Offshore, please visit our website at www.wtoffshore.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in W&T Offshore's Annual Report on Form 10-K for the year ended December 31, 2012 and subsequent Form 10-Q reports found at www.sec.gov or at our website at www.wtoffshore.com under the Investor Relations section.
SOURCE W&T Offshore, Inc.