QGEP farms out Sergipe-Alagoas acreage to Exxon, Murphy

Brazil’s oil company QGEP has completed two separate farm-out agreements, one with ExxonMobil and one with Murphy Oil.

The farm-out agreements are for Blocks SEAL-M-351 and SEAL-M-428 located in the Sergipe-Alagoas Basin. Additionally, QGEP and its partners have been awarded blocks SEAL-M-501 and SEAL-M-503 in Wednesday’s 14th ANP Bidding Round.

The farm-out agreements relate to the blocks that Queiroz Galvão Exploração e Produção S.A., wes awarded in the ANP’s 13th Bidding Round in October 2015. These Blocks are 100%-owned by QGEP, and are located in ultra-deep waters in the Sergipe-Alagoas Basin,  80 to 100 kilometers off the coast of Brazil and cover a total area of approximately 1,500 square kilometers (580 square miles).

Under the terms of the farm-out agreements, QGEP will retain a 30% working interest and ExxonMobil and Murphy Oil will acquire 50% and 20%, respectively. QGEP will be reimbursed for 70% of the R$100 million signature bonus that it paid to acquire the blocks. Additionally, QGEP will be fully reimbursed for seismic costs related to the blocks, among other considerations.

What is more QGEP and its partners ExxonMobil and Murphy Oil acquired Blocks SEAL-M-501 and SEAL-M-503 in the same basin in 14th ANP Bidding Round.

These blocks are located adjacent to SEAL-M-351 and SEAL-M-428. The total signature bonus for these exploration blocks was R$109,9 million or R$33,0 million net to QGEP. The consortium is also committed to acquire seismic data for the blocks.

“We are pleased to be partnering with ExxonMobil, who will be the operator with a 50% interest in the blocks, and Murphy Oil, with a 20% working interest. The quality and expertise of this partnership guarantees the use of best industry practices in this challenging operating area. We believe that QGEP is very well positioned to benefit from the improved industry environment, as well as the relationships we are developing with these new partners,”  Lincoln Guardado, Chief Executive Officer, said.

Worth noting, the deal marks Murphy Oil’s entry into Brazil’s oil and gas sector, with these news assets sitting near several major Petrobras discoveries.

“The entry into these four blocks is consistent with Murphy’s long-term strategy of adding to our focused offshore exploration portfolio at the bottom of the cycle. We look forward to working with an experienced Brazilian exploration and production company like QGEP, as well as a world-class operator in ExxonMobil,” stated Roger W. Jenkins, President and Chief Executive Officer.

Offshore Energy Today Staff

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