Murphy Oil Corp. disclosed March 21 its subsidiary has signed a deal with a unit of Thailand's PTT Exploration and Production Public Co. Ltd. to sell its Malaysian subsidiaries for $2.13 billion, effective Jan. 1. The transaction's closing is expected in the second quarter and is subject to government approvals.
The Malaysian subsidiaries are Murphy Sabah Oil Co. Ltd. and Murphy Sarawak Oil Co. Ltd., which have a net production value of more than 48,000 barrels of oil equivalent per day composed of 62% liquids.
Under the deal, the PTTEP unit will pay another $100 million bonus based on future exploratory drilling results before October 2020.
Proceeds of the transaction will be used to commence a $500 million share repurchase program set to expire on Dec. 31, 2020, and to reduce its $750 million debt that is composed of a $325 million credit facility and $425 million for the repurchase of senior notes.
Another $750 million will be earmarked for potential U.S. oil acquisitions, funding of deepwater projects and U.S. onshore opportunities.
Murphy Oil said it will continue its exploration plans in both the Eagle Ford Shale and the Gulf of Mexico.
From 2019 to 2023, the company targets an annual output growth of 8% in its operations for U.S. onshore, Canada onshore and North America offshore.
Bank of America Merrill Lynch served as adviser to Murphy on the transaction, while Tudor, Pickering, Holt & Co. served as financial adviser to Murphy.