Danish shipping and oil group A.P. Moller-Maersk said on December 22 it had agreed to buy Devon Energy Corp's interests in the Cascade, Jack and St. Malo oil fields in the Gulf of Mexico. Maersk said in a statement Maersk Oil would pay $1.3 billion in cash.
"Ahead of on-stream production, Maersk Oil's estimated additional investment is expected to be in the range of $1.3-1.8 billion, going up to around $4 billion over time," Maersk said.
The Danish group said the deal involved a 50 percent participating interest in the Cascade field and a 25 percent participating interest in each of the Jack and St. Malo fields. It said the Petrobras operated Cascade field is expected to start production in 2010 and the Chevron-operated Jack and St. Malo fields are expected to start production in 2014.
"This is a significant long-term investment, which we expect will generate a good return," Maersk's chief executive, Nils Smedegaard Andersen, said in the statement. In a separate statement, Devon said it planned to use the sales proceeds to reduce debt.