In November Woodside said it was likely to abandon the Gulf of Mexico unless it soon built up a dominant position in that region.

Strategic planning director Betsy Donaghey said Woodside had a strategy of developing regional hubs based on oil or gas assets that it could use to gain market leverage over wide areas. Its Gulf operations were failing to meet the hub criteria, she said.

"We will either make it work or we will get out," she said at the time.

Woodside CEO Don Voelte said the alliance was an important step in the development of Woodside’s Gulf of Mexico business and its strategy to improve its competitive positioning in the region.

“It builds on our strategic objectives for the Gulf of Mexico by bringing an established and experienced management team to Woodside’s Gulf business,” Voelte said.

Woodside director of exploration Agu Kantsler said the management of Explore Enterprises had more than 120 years of combined experience in building successful businesses in the Gulf of Mexico.

“We believe that the combination of this team with Woodside’s technical expertise and substantial lease position will provide both companies with significant benefits,” Kantsler said.

The alliance will maintain offices in Texas and Louisiana. It has a five-year term with an option to extend for a further two years.

For each project, Woodside will hold 95% of the alliance’s combined interests while Explore Enterprises will hold the remaining 5%. Explore will also buy 5% stakes in Woodside's existing Gulf blocks, excluding the Neptune and Midway discoveries.

Explore Enterprises’ interest in each project will increase from 5% to 12.5% after Woodside has recovered the present value of its invested capital in those projects.

The Explore Enterprises management team will be accountable to the board of Woodside Energy (USA), which is chaired by Voelte.