Woodside Petroleum Ltd subsidiary Woodside Energy also assumed Gryphon’s debt, making the total acquisition cost $US296.9 million ($A397.62 million).
Gryphon has stakes in 118 leases in the Gulf, 95 of which are operated by the company.
The transaction will be immediately earnings and cashflow accretive, according to Woodside.
The purchase delivers immediate production from 15 fields, which are producing 30 million cubic feet of gas equivalent a day. A further six fields under development could double production by the end of 2005.
Independent petroleum consultants Ryder Scott have estimated Gryphon’s proved reserves as of June 30 to be 72.5 billion cubic feet of gas equivalent. Proved plus probable reserves are estimated to be 114 Bcf. These reserves are made up of at least 85% gas.
Woodside said it had identified 15 high-quality prospects from Gryphon’s exploration portfolio, with exposure to net risked volumes of 83 Bcf. At least four of these prospects are being, or will be, drilled by the end of the year. An additional 65 prospects in Gryphon’s portfolio are being evaluated.
Woodside has hedged gas production from Gryphon at average annual prices of US$10.04, US$9.01 and US$8.39 per million British thermal units for the years 2006, 2007 and 2008 respectively. These hedges, in addition to Gryphon's existing hedges, represent about 50% ofexpected production to the end of 2008 and underpin about half the acquisition cost.
"This delivers Woodside a significant expansion of our exploration portfolio in the Gulf, and also provides us existing production," Woodside chief executive Don Voelte said.
"It capitalises on the alliance we formed with Explore Enterprises earlier this year, and builds Woodside's position in a region we have identified as a core area of interest."
Production at the BS41 platform has been halted, cutting Gryphon’s output by six million cubic feet a day to 24 million.
Meanwhile, BHP Billiton said yesterday it had suspended 25 000 barrels of production per day and a joint venture, in which BHP has a 30%, is monitoring a drifting rig.
BHP’s production loss is worth about $1 million per day at current prices, with production suspended at the Mad Dog, West Cameron, Genesis, Green Canyon, Typohoon and Boris operations.
