Kosmos Energy, the US partner of BP in the Mauritania-Senegal floating LNG projects, has completed its acquisition for more than $1.22 billion of Deep Gulf Energy as it keeps faith in the deepwater Gulf of Mexico as other operators retreat to the US onshore shale basins.
Kosmos, based in Dallas, said it purchased Deep Gulf Energy to expand its assets in the Atlantic Margin exploration area of the most distant parts of the Gulf that can have similar deepwater challenges to offshore West Africa.
“By acquiring DGE, Kosmos adds to its deepwater Atlantic Margin portfolio an established business with attractive assets and a strong record of growing production and reserves through infrastructure-led exploration,” said Kosmos.
“This immediately accretive acquisition enhances the scale of the company and is expected to generate significant free cash flow,” added Kosmos.
Houston, Texas-based DGE was founded in 2005. The company has drilled 20 wells, 16 of which have been completed. The company achieved its first production in 2007 and the acquisition would add around 25,000 barrels of oil equivalent per day of production for Kosmos.
Kosmos notes that while many competitors have been leaving the Gulf of Mexico to pursue onshore shale plays, their departures have created an opportunity to further open up the Gulf.
“The best deepwater assets can compete with the best of shale, and now is a good time to enter the Gulf of Mexico,” said Kosmos.
The completion of the DGE deal comes as Kosmos and BP are moving forward with contract awards for the Tortue-Ahmeyim natural gas project in the Atlantic Margin of Mauritania and Senegal that will underpin several FLNG ventures.
The Tortue-Ahmeyim project will produce gas from a deepwater subsea system and transfer it to an FLNG production facility at a nearshore hub located on the Mauritania and Senegal maritime border.
The FLNG facility for Phase 1 is expected to deliver about 2.5 million tonnes per annum of LNG on average.
The full project will target 10 MTPA of LNG output as well as making gas available for domestic use in both Mauritania and Senegal.
First gas from the African project is expected in the first half of 2022.