5. Acquisitions and Divestitures

Mobile Bay Properties

In August 2019, we completed the purchase of Exxon Mobil Corporation's ("Exxon") interests in and operatorship of oil and gas producing properties in the eastern region of the Gulf of Mexico offshore Alabama and related onshore and offshore facilities and pipelines, (the "Mobile Bay Properties").  After taking into account customary closing adjustments and an effective date of January 1, 2019, cash consideration paid by us was $169.8 million which includes expenses related to the acquisition.  We also assumed the related ARO and certain other obligations associated with these assets.  The acquisition was funded from cash on hand and borrowings of $150.0 million under the Credit Agreement, which were previously undrawn.  We determined that the assets acquired did not meet the definition of a business; therefore, the transaction was accounted for as an asset acquisition.  The following table presents the purchase price allocation (in thousands):   

During 2020, we completed the purchase of the remaining interest in two federal Mobile Bay fields from Chevron U.S.A. Inc. ("Chevron"). After taking into account customary closing adjustments and an effective date of January 1, 2020, cash consideration paid by us was $2.2 million which includes expenses related to the acquisition.

Magnolia Field

In December 2019, we completed the purchase of ConocoPhillips Company's ("Conoco") interests in and operatorship of oil and gas producing properties at Garden Banks blocks 783 and 784 (the "Magnolia Field").  After taking into account customary closing adjustments and an effective date of October 1, 2019, cash consideration was $15.9 million which includes cash expenses related to the acquisition.  We also assumed the related ARO.  The acquisition was funded from cash on hand.  We determined that the assets acquired did not meet the definition of a business; therefore, the transaction was accounted for as an asset acquisition.  The following table presents the purchase price allocation (in thousands):   

During 2020, we completed the purchase of the remaining interest in the Magnolia field from Marubeni Oil & Gas (USA) ("Marubeni"). After taking into account customary closing adjustments and an effective date of October 1, 2019, cash consideration paid by us was $1.5 million which includes expenses related to the acquisition.

Heidelberg Field 

On April 5, 2018, we completed the purchase of Cobalt International Energy, Inc.'s 9.375% non-operated working interests located in Green Canyon blocks 859, 903 and 904 (the "Heidelberg Field"). After taking into account customary closing adjustments and an effective date of January 1, 2018, cash consideration was $16.8 million which includes cash expenses related to the acquisition.  We determined that the assets acquired did not meet the definition of a business; therefore, the transaction was accounted for as an asset acquisition. In connection with this transaction, we were required to furnish a letter of credit of $9.4 million to a pipeline company as consignee. We recognized ARO of $3.6 million as a component of the transaction.  In conjunction with the purchase of an interest in the Heidelberg field, we assumed contracts with certain pipeline companies that contain minimum quantities obligations through 2028 resulting in an estimated commitment of $19.6 million as of the purchase date.

Permian Basin

On September 28, 2018, we completed the divestiture of substantially all of our ownership in an overriding royalty interests in the Permian Basin.  The net proceeds received were $56.6 million, which was recorded as a reduction to our full-cost pool.