Murphy Oil’s subsidiary has entered a sale and purchase agreement to acquire the BW Pioneer floating production storage and offloading vessel (FPSO) from BW Offshore for $125m (Nkr1.33bn), subject to customary closing adjustments.
Under the agreement, an initial payment of approximately $100m will be made upon delivery by the end of the first quarter of 2025 (Q1 2025).
The remaining balance is due upon the fulfilment of certain contractual obligations, expected by the end of Q2 2025.
The two companies intend to finalise a five-year reimbursable operations and maintenance (O&M) contract before 18 March, under which BW Offshore will continue delivering O&M services for five years.
Murphy Oil president and chief executive officer Eric M. Hambly said: “I am pleased to announce this value-creating transaction with BW Offshore, and I look forward to continuing our partnership. By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60m annually with a payback of about two years independent of oil price, while enhancing returns for future infield development and exploration and increasing net proved developed reserves by approximately eight million barrels of oil equivalent.
“It is also important to note that the purchase price was included in our 2025 capital expenditure guidance range of $1,135m to $1,285m. Further, the FPSO is located in the prolific Wilcox trend, allowing for operated and non-operated exploration prospects to tie back to a cost-advantaged facility.”
The BW Pioneer FPSO will continue to operate at its current location and support the Cascade and Chinook fields in the Gulf of Mexico (GOM).
It was the first FPSO vessel approved for use in the GOM and has been in operation since its conversion in 2009.
The vessel can store 600,000 barrels of oil and process roughly 80,000 barrels of oil per day.
BW Offshore CEO Marco Beenen said: “The divestment is in line with our strategy of capturing value from the existing FPSO fleet. We are pleased to ensure continuity for BW Pioneer and our experienced team, while also meeting our client’s need for a more flexible operating model.
“The transaction strengthens our financial position and supports execution of our long-term growth strategy of developing floating production infrastructure projects and energy transition solutions.”
