Australian Entek Energy has entered into an agreement with Houston-based Peregrine Oil & Gas to sell the company’s entire Gulf of Mexico portfolio for almost $3m as market conditions continue to take their toll, Oil Price reported.

As Yahoo News wrote, Entek will be divesting its 38% interest in the GA A133 block and its 25% interest in the PN 975 block, as well as its royalty interest in two other blocks, VR 341 and 342.

According to an Entek press release, “by way of background, the GA A133 and PN 975 gas developments have now both been shut-in following their natural depletion and are scheduled to be plugged and abandoned (P&A) during the course of this year and next”.

As part of this deal, Peregrine, which operates both these blocks, has assumed all of Entek’s P&A obligations in GA A133 and PN 975 including the provision by Peregrine for all bonding requirements which have recently been increased by the relevant US Government authorities. Entek’s share of these bonding and abandonment obligations is estimated to total in excess of $1m. In addition, Peregrine has agreed to pay Entek a cash consideration of approximately $1.86m.