Murphy Oil Brings Kings Quay Platform Online in U.S. Gulf of Mexico
Just in time for a red-hot energy market, Murphy Oil has brought its new Kings Quay platform online in the U.S. Gulf of Mexico.
Kings Quay is the floating production platform for the Khaleesi, Mormont and Samurai fields in the deepwater GoM's Green Canyon lease area, roughly 100 nm south of Port Fourchon. Production is now online, and Murphy is finishing up completion on five other wells that will feed into the platform.
"This has been a strategic project of ours since we acquired the Khaleesi / Mormont assets in mid-2019 and integrated our Samurai discovery into the overall development," said Murphy Oil CEO Roger W. Jenkins in a statement. "The production coming online is forecast to generate significant free cash flow, which will allow us to continue to deliver with $600 to $650 million of targeted debt reduction this year."
Jenkins said that production from Kings Quay would continue to rise through 2022 as more wells come online. According to KeyBanc analyst Leo Mariani, the target for initial production from the Khaleesi / Mormont / Samurai complex is 20,000 bpd, but that could rise. With the U.S. oil benchmark West Texas Intermediate (WTI) running at just over $100, that equates to an initial revenue stream of $2 million daily. The platform is designed to process up to 85,000 barrels of oil per day.
While Murphy is the operator for Kings Quay, it holds no ownership stake in the project. As part of its efforts to adapt to the realities of the pandemic, it sold all of its equity in the development to ArcLight Capital Partners in 2021. However, it remains in charge of bringing the platform online.
Two other big projects are expected to come online this year, BP's Mad Dog Phase 2 and Shell's Vito field. Both are substantially larger than Kings Quay. An additional three smaller tieback projects are on the schedule. According to a recent forecast from S&P Platts, U.S. GoM oil output should rise above 2.0 million bpd by the end of the year, up from about 1.7 million bpd today.