The Sydney-based company said yesterday it had signed a binding agreement to buy the package of onshore and offshore production assets from privately-owned United States outfit LLOG Exploration Company.

Production from the assets is expected to be 9-10 billion cubic feet of gas equivalent in the 2008 calendar year, which Petsec said would more than double its expected output from its US assets.

Proved and probable (2P) reserves of 36.2 billion cubic feet of gas equivalent will also more than double its reserves of 33.5Bcfe. Net proved (1P) reserves to be acquired are 24.8Bcfe.

Petsec intends to fund the acquisition – which includes six producing gas fields and another gas field soon to be producing – with a debt facility.

Chief executive Terry Fern said he expected the transaction to settle early next month.

“It will substantially increase the scale, diversity and efficiency of our US exploration, development and production operations,” he said.

“Our US reserves and production will double, leading to significantly increased earnings and a stronger platform to pursue our traditional exploration-based reserves growth.”

Under the agreement, Petsec will have a majority working interest in all but one of the fields and will become the operator of two of the three offshore and two of the four onshore fields.

The three offshore producing gas fields - Main Pass 20 & 270 and Chandeleur 31-32 – in the eastern GoM are close to Petsec’s EMain Pass and Mobile Bay gas fields.

Three of the four onshore gas fields in Louisiana are in production and the fourth is expected to come online later this year.

Only one of the fields is subject to pre-emptive purchase rights.