Harbour Energy has this morning announced it has entered the US Gulf of America with a $3.2billion (£2.39billion) acquisition of LLOG Exploration Company.
The acquisition is made up of $2.7billion (£2.01billion) in cash and $0.5billion (£0.37billion) of Harbour's voting ordinary shares.
Announcing the acquisition agreement this morning, Harbour Energy said it "marks the company's strategic entry into the US Gulf of America", strengthening its global portfolio and establishing another core business unit alongside Norway, the UK, Argentina and Mexico.
Harbour - which up until recently was entirely North Sea focussed - has been investing heavily outside of the UK after the Energy Profits Levy (EPL) forced the company to shed 700 staff.
Linda Z Cook, CEO Harbour, commented: "Today's announcement delivers on Harbour's long-standing ambition to establish a presence in the deepwater Gulf of America.
"With LLOG, we found the right combination of high-quality assets and a talented team, providing a strong strategic and cultural fit with our company. The transaction positions us as a leading player in a region with well-established infrastructure, a supportive fiscal and regulatory environment and opportunities for additional growth.
"The oil-weighted, deepwater LLOG portfolio enhances our production profile, provides significant operational control, extends reserve life and improves our margins. In addition, the LLOG organisation brings decades-long experience in the Gulf of America with a successful track record, creating a solid foundation for Harbour in the area.
"We are proud to build on LLOG's strong heritage in the Gulf of America. Its advantaged portfolio and exceptional team, led by CEO Philip LeJeune, have established the company as one of the region's most respected operators. Following completion, LLOG will serve as Harbour's new Gulf of America business unit, which will incorporate the LLOG name in order to preserve and leverage its history and reputation.
"We look forward to completing the transaction and welcoming Philip, his leadership team, and the entire organisation to Harbour, and to the future we will create together."
Alexander Krane, CFO Harbour, commented: "The LLOG business complements our portfolio with a high-quality, long-life asset base underpinning strong production and cash flow growth profiles.
"This transaction also builds on the recently announced agreements to acquire Waldorf in the UK and divest assets in Indonesia, materially enhancing our free cash flow outlook.
"Consistent with our practice following previous acquisitions, our priorities following completion of the transaction will be the safe integration of assets and people, ensuring a robust and resilient portfolio, continuing to deliver competitive shareholder returns and strengthening our investment-grade credit rating profile."
Philip LeJeune, LLOG CEO, commented: "We are pleased to be joining an outstanding company and believe that by uniting our teams and expertise, we're unlocking new possibilities, empowering our people, and setting the stage to achieve extraordinary results with Harbour.
"As we look to the future, we remain dedicated to maintaining the same high ethical and operational standards that have helped guide us for the past 48 years, but with a new partner whose shared vision of growth, innovation, and operational excellence will help us achieve significant successes through a strong collaborative culture."