Fieldwood: Gulf oil growth promising

Matt McCarroll doesn’t listen to naysayers.

“People have been saying the Gulf of Mexico is dead for 20 years,” McCarroll, president and CEO of Fieldwood Energy, said Tuesday.

He’s not buying it.

Instead, McCarroll and Fieldwood last week bought Apache Corp.’s Gulf of Mexico shelf business for $3.75 billion, a purchase Fieldwood said represents the “largest operated asset base” on the shelf.

The sale involves 1.9 million net acres and rights to 500 blocks that Fieldwood believes have been underused, as Apache’s attention has turned in recent years from offshore to land-based operations elsewhere. Apache had more than 600 platforms in the Gulf.

The Gulf holdings used to represent about 40 percent of Apache’s business, McCarroll said. That has dropped to 10-15 percent as Apache turned to places like the Permian Basin, Canada and Egypt for production.

The strategy worked well for Fieldwood, which describes itself as a Houston-based portfolio company of Riverstone Holdings LLC. Formed last year, it has 12 employees, many of them top managers from Dynamic Offshore Resources.

Riverstone Holdings and Fieldwood partnered to build Dynamic, which was created in 2008, developed it into a large operator on the Gulf of Mexico shelf and sold it in 2012 to SandRidge Energy for $1.3 billion. In December, Fieldwood announced that Riverstone had committed $600 million to Fieldwood’s quest to acquire and develop conventional oil and gas assets, while Fieldwood’s management team committed $25 million.

McCarroll and Fieldwood are preparing to hire Apache’s 435 offshore and 85 office employees, whom they hope will join the new company. Of that number, 276 are from the Lafayette area.

“The employee team is one of the main reasons we bought the assets,” said McCarroll, a Lafayette native. McCarroll said he met employees in Lafayette last week in an effort to introduce himself and Fieldwood to them. He said Fieldwood would assemble a benefits package to present to the employees within a month.

The deal reflects two distinct strategies to Gulf exploration and production. Apache had been seeking to sell $4 billion in assets to “rebalance” its portfolio, generate strong returns and “drive more predictable production growth.”

“The shallower horizons in the Shelf have matured to the point that dependable production growth is more difficult to achieve than from our onshore liquids plays,” G. Steven Farris, Apache chairman and CEO, said in a prepared statement last week.

But McCarroll said Tuesday that Fieldwood sees no stumbling blocks to growing production. Fieldwood bought the company, he said, to grow it.

“We will be drilling new exploration targets. We see more oil than people think is there. At $100 a barrel, that’s fantastic,” he said.

McCarroll also said many larger companies are leaving the Gulf, creating new opportunities for companies like Fieldwood.

“Three months ago, I would not have seen this,” he said of the acquisition.

The Apache assets have been around a long time, he said. Some of the fields have been used for 30 years. He said the company will increase drilling and work on existing assets.

McCarroll is a graduate of the former Cathedral High School and LSU. He said he still has family in Lafayette.

Fieldwood will move into Apache’s offices in Houston and on Pinhook Road in Lafayette.