Kosmos Energy has agreed to acquire Deep Gulf Energy (DGE) from its private equity owner for $1.23 billion, expanding the deepwater oil and gas firm’s operations into the Gulf of Mexico.
Dallas-based Kosmos, which currently operates in Africa and South America, will pay $925 million in cash and $300 million in Kosmos common stock to acquire DGE, with the transaction expected to close towards the end of the third quarter.
Acquiring DGE’s business will increase Kosmos’ production by more than 50 percent to 70,000 barrels of oil equivalent per day (boed) from around 45,000 boed now, with the company’s estimated reserves rising 40 percent to around 280 million barrels of oil equivalent, the statement said.
“The best deepwater assets can compete with the best of shale, and now is a good time to enter the Gulf of Mexico,” Andrew Inglis, chairman and chief executive officer of Kosmos, said in the statement.
Speaking with Reuters, Inglis said the exit in recent years of a number of exploration and production companies from the Gulf of Mexico to invest more in onshore shale projects had created a space in the market for Kosmos to exploit.
It had been able to secure high quality assets without the level of competition that energy firms might experience in other places, he said.