05:47 PM EDT, 03/12/2025 (MT Newswires) -- Murphy Oil ( MUR ) said its subsidiary agreed to acquire the pioneer floating production storage and offloading vessel from BW Offshore for $125 million.

The gross purchase price includes an initial $100 million payment upon delivery by the end of Q1, with the remaining balance due after certain contractual obligations are met, likely by the end of Q2, the company said late Wednesday.

"By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60 million annually with a payback of about two years independent of oil price," Chief Executive Eric Hambly said.

The move will enhance "returns for future infield development and exploration and increase net proved developed reserves by approximately 8 million barrels of oil equivalent," Hambly added.

The FPSO will remain at its current location, supporting operations at the Cascade and Chinook fields in the Gulf of Mexico, which the US government now refers to as the Gulf of America.

As part of the deal, BW Offshore will continue to provide operations and maintenance services under a new five-year reimbursable contract.

Meanwhile, Murphy reaffirmed its capital expenditure guidance range of $1.14 billion to $1.29 billion for 2025, with Q1 capex reaffirmed at $425 million.

Shares of Murphy Oil ( MUR ) were up over 2% in after-hours trading.