SandRidge Energy is to almost entirely exit the deepwater region of the Gulf of Mexico in a US $730 million asset deal with Fieldwood Energy, which is dipping its toe into the deepwater sector for the first time.

Oklahoma-based SandRidge has agreed to sell its entire GoM assets to focus on a mid-continent growth strategy, while this is Fieldwood’s initial move into the market. However, SandRidge has kept a small percentage of one asset because of the potentially significant Miocene reserves believed to lie deeper under the existing Bullwinkle field.
Fieldwood is to pay $750 million in cash and assumes $370 million of decommissioning liabilities as part of the deal.

Altogether the acquired asset package involves 57.2 MMboe of proved reserves – of which 51% is oil and 72% is already developed, based on a December 2013 assessment by Netherland Sewell and Associates. Also there are 11.4 MMboe of probable, and 9 MMboe of possible reserves, totalling 77.5 MMboe. Currently the assets which comprise both Gulf Coast properties and the deepwater Bullwinkle field, are producing 25,000 boe/d.

Bullwinkle, which was discovered in October 1983 in the Green Canyon area of the US Gulf in a water depth of 412 m (1,353 ft) was developed by Shell with a TLP and came onstream in July 1989.

Fieldwood, which three months earlier made its first acquisition from Apache Corporation and now holds 50 blocks across the Gulf of Mexico and which is led by former Apache and Dynamic Offshore Resources executives, says the deal makes it the largest asset owner in the Gulf of Mexico shelf with 650 blocks and net production of 125,00 boe/d, of which 54% is oil.

“This transaction, coming only three months after the closing of our inaugural acquisition from Apache, demonstrates Fieldwood’s continued commitment to our acquire and develop strategy in the Gulf of Mexico,” noted company president and chief executive Matt McCarroll. He pointed out that the acquisition brings a number of “...near-term, high-quality drilling prospects” to the company’s drilling inventory.

SandRidge’s retained part of Bullwinkle sees it keep 2% equity in deep Miocene prospects in Green Canyon Block 65 which contains Bullwinkle, and South Pass Block 60.

SandRidge did recently license 25 blocks of seismic data over Bullwinkle and the adjacent Miocene producing subsalt fields, with the purpose of analysing the Miocene reservoirs underneath the field’s platform. With Fieldwood it is now likely to test the Miocene prospectivity, where gross resources are being estimated at around 200 MMbbl of oil. The Miocene-age structure is between 4,572-7,620 m (15,000-25,000 ft) below the surface, and was first identified by Shell but never pursued. Before the sale to Fieldwood, SandRidge had plans to spend up to approximately US $115 million on GoM drilling, although it’s not known whether the owner will immediately fulfil those plans.

Offshore