Petsec Energy Ltd says a US$110 million (A$122 million) acquisition that will double reserves and production for the Sydney based company’s traditional USA operations in the Gulf of Mexico and onshore Louisiana.

The acquisition - which includes six producing gas fields and another gas field soon to be producing - will be fully debt funded and will provide immediate earnings growth for shareholders.

Petsec Energy had signed a binding agreement to purchase the package of onshore and offshore production assets from LLOG Exploration Company LLC, a privately owned US oil and gas company, for a total consideration of US$110 million on the effective date of 1 October 2007. Assets to be Acquired • Interests in three offshore producing gas fields in the Eastern Gulf of Mexico, USA, being Main Pass 20 & 270 and Chandeleur 31/32. These fields are close to Petsec Energy’s Main Pass and Mobile Bay gas fields.

• Interests in four onshore gas fields in Louisiana, USA, three of which are currently producing; the fourth is expected to commence production late this year.

Under the agreement, Petsec Energy will have a majority working interest in all but one of the fields and will become the operator of two of the three offshore and two of the four onshore fields.Only one of the fields is subject to pre-emptive purchase rights.

“This acquisition is a very positive transaction for Petsec Energy and its shareholders. It will substantially increase the scale, diversity and efficiency of our US exploration, development and production operations. Our US reserves and production will double leading to significantly increased earnings and a stronger platform to pursue our traditional exploration based reserves growth.”