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Petroleum

Leviathan Gas Pipeline Partners Completes Transaction with Tatham Offshore for Gulf of Mexico Properties

Strategic Insights

— 1 min read

Leviathan Gas Pipeline Partners, a publicly owned limited partnership, has finalized a deal with Tatham Offshore, Inc. for the purchase and development of three properties in the Gulf of Mexico. The transaction involves the transfer of a 100% working interest in the Phar Lap Shallow, Spectacular Bid, and Spend A Buck properties to Flextrend Development Company, a newly formed subsidiary of Leviathan. The deal's terms include a payment of $15 million at closing, with an additional $15 million to be paid on August 15, 1995. Tatham Offshore retains the option to pursue other offers and negotiations prior to the spudding of the initial well, estimated to begin in mid-September.

Key Takeaways:

  • Leviathan Gas Pipeline Partners has acquired 100% of the working interest in three properties in the Gulf of Mexico through a transaction with Tatham Offshore, Inc.
  • The properties involved in the deal are Phar Lap Shallow (Viosca Knoll Block 817), Spectacular Bid (Garden Banks Block 72), and Spend A Buck (Garden Banks Block 117).
  • The transaction includes a payment of $15 million at closing, with an additional $15 million to be paid on August 15, 1995.
  • Tatham Offshore has the option to pursue other offers and negotiations prior to the spudding of the initial well, estimated to begin in mid-September.
  • Flextrend Development Company, a subsidiary of Leviathan, has the option to retain up to 50% of the working interest in each property by forgiving its right to recover an equal percentage of the investment and development costs.
  • The deal strengthens Leviathan's position in the Flextrend and Deepwater areas, allowing for timely expansion plans.
  • Leviathan operates or holds interests in nine pipeline systems located offshore Louisiana and Texas, gathering approximately 2.5 billion cubic feet of natural gas per day.

Statistics:

  • $15 million payment at closing
  • $15 million payment on August 15, 1995
  • Up to 2.5 billion cubic feet of natural gas gathered per day by Leviathan's pipeline systems
  • 9 pipeline systems operated or held by interest by Leviathan in the Gulf of Mexico
  • 50% working interest option for Flextrend Development Company in each property
  • 15% annual interest rate on investment and development costs

Sources:

  • Leviathan Gas Pipeline Partners, L.P.
  • Tatham Offshore, Inc.
  • Leviathan Gas Pipeline Partners' press release, dated July 6, 1995.

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