Oceaneering Announces Medusa Spar Participation Agreement

abarrelfullabarrelfull wrote on 20 Jul 2012 13:18

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September 3, 2003

Oceaneering International, Inc. (NYSE:OII) announced today that it has signed an agreement to participate in the formation of a limited liability company (LLC), which will own a 75% undivided ownership interest in the deepwater production spar on the Medusa field in the Gulf of Mexico, subject to the occurrence of certain events. The LLC will earn a tariff based on production volume throughput. Oceaneering expects to invest approximately $45 million to acquire a 50% ownership in this LLC and estimates the closing of this transaction to occur in the fourth quarter 2003.

The agreement is with Murphy Exploration & Production Company - USA, a subsidiary of Murphy Oil Corporation (NYSE:MUR), and Callon Petroleum Operating Company, a subsidiary of Callon Petroleum Company (NYSE:CPE). Two main conditions must be satisfied for closing of this transaction to occur. The first is that the spar shall have met certain operational criteria. The second is securing non-recourse financing for at least one-half of the spar’s cost.

Oceaneering will account for its investment in the LLC and its share of the LLC’s results of operations using the equity method of accounting for unconsolidated affiliates. Further guidance as to the expected impact on Oceaneering’s earnings will be provided upon closing of the transaction.John Huff, Oceaneering Chairman and Chief Executive Officer, stated, “We appreciate the opportunity to participate in the mobile offshore productions systems market in the Gulf of Mexico through our ownership interest in the LLC. This investment offers the opportunity for a good rate of return and a source of stable long-term earnings for Oceaneering.”

The Medusa Spar is moored in over 2,200 feet of water in the Gulf of Mexico, Mississippi Canyon Block 582. It is in the final stages of being outfitted for the commencement of production operations, initially from six wells.

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