W&T Offshore has signed an agreement to sell its interest in the Yellow Rose field in the Permian Basin of West Texas, US, to oil and gas company Ajax Resources and affiliates of Kelso & Company for $376.1m.

Following the deal, W&T will retain a 1%-4% sliding scale residual overriding royalty interest in the field.

W&T’s interest in its Yellow Rose field comprise approximately 25,800 net acres in Andrews, Martin, Gaines, and Dawson counties in West Texas.

Yellow Rose field hosts 200 vertical and horizontal drilled and producing wells and produced averaged approximately 3,000 barrels of oil equivalent (Boe) per day from in July 2015.

W&T Offshore chairman and CEO Tracy Krohn said: "This sale will allow us to strengthen our balance sheet and improve our financial flexibility to pursue the acquisition of Gulf of Mexico assets while valuations are favorable.

"We believe that current conditions are good for W&T to identify quality offshore producing assets that offer upside exploration and development opportunity."

The transaction, which is subject to customary closing adjustments, is scheduled to be completed during the third quarter of 2015.

Proceeds from the transaction will be used by W&T to pay the outstanding balance under the revolving credit facility as well as fund the future operations and acquisitions.

Ajax executive chairman and investor Forrest Wylie said: "This investment positions us with a substantial acreage footprint in one of the most prolific and low-cost oil basins in the U.S."

W&T owns a lease ownership of about 1 million gross acres offshore assets, including 0.6 million gross acres on the Gulf of Mexico Shelf and 50,000 gross acres onshore, mainly in Texas.