Murphy Oil has closed the sale of its 50% stake in the King’s Quay floating production system (FPS) and associated export pipelines to a fund managed by ArcLight Capital Partners. The unit and associated laterals will be co-owned in a joint venture with entities managed by Ridgewood Energy Corporation, including ILX Holdings III.
Murphy is no stranger to selling off interest in its deepwater platforms. In 2003, the company and its partners sold a 50% stake in its Medusa spar to Oceaneering for $45 million.
The King’s Quay unit is more than 90% built at Hyundai Heavy Industries in South Korea and is scheduled to go into service in mid-2022. The FPS is designed to process 80,000 B/D of oil and 100 MMcf/D of natural gas and will handle the anticipated production from the Khaleesi/Mormont and Samurai fields in the deepwater US Gulf of Mexico.
Khaleesi/Mormont is a subsalt Miocene-aged discovery acquired by Murphy as part of its $1.3 billion purchase of deepwater US Gulf properties from LLOGin 2019. The duo will be developed using seven subsea wells and associated infrastructure tied back to the King’s Quay platform. Khaleesi is in Green Canyon Block 390, while Mormont is situated two blocks south in Green Canyon Block 478. Samurai, a legacy find from 2009, is in Green Canyon Block 476 and will be developed via four subsea wells tied back to King’s Quay.
Murphy confirmed recently that it had received all the permits necessary to begin development well drilling for the Khaleesi/Mormont/Samurai project, which it expects to start during the second quarter of 2021.
The previously announced sale reimburses Murphy’s past capital expenditures of around $270 million related to the King’s Quay system. Murphy intends to use the proceeds to repay borrowings under the $1.6-billion senior unsecured credit facility, with the remainder to be held for general corporate purposes.
