Energy XXI has closed on the sale of the East Bay Field, located 89 miles southeast of New Orleans near the mouth of the Mississippi River, for $21 million to a private buyer.
The field lies in water depths ranging up to approximately 170 feet. It consists of Blocks 24, 28 and sections of Blocks 11, 23, 25, 27 and 37. It was acquired in 2000 by EPL Oil & Gas and then again in 2014 by Energy XXI.
In addition, the company said it will retain a 5% overriding royalty interest on these assets for a period not to exceed 5 years from the closing date, and it will also retain 50 percent of the deep rights associated with the East Bay Field.
Energy XXI notes that the East Bay Field produced approximately 2,050 barrels of oil per day (Bbl/d) net on average for fiscal 2015, with net reserves estimated at approximately 9.4 million barrels of oil equivalent, 94 percent liquids, as of June 30, 2015. The company says that the buyer will assume plugging and abandonment liability.
“The sale of East Bay allows the company to focus on activities in fields with higher profitability, while significantly reducing our plugging and abandonment liability in the Gulf of Mexico,” Chairman, President and Chief Executive Officer John Schiller said.
“We continue to evaluate additional opportunities to sell non-core assets in the Gulf of Mexico.”