Whiting Petroleum Corporation announced the signing of a purchase and sale agreement with an undisclosed private seller to acquire the operated interest in five producing gas fields in the Green River Basin of Wyoming. The purchase price will be $65 million, or $1.29 per thousand cubic feet equivalent (Mcfe). The estimated proved reserves are 50.5 billion cubic feet equivalent (Bcfe). Whiting will operate approximately 95% of the net daily production from the properties which is currently 6.3 million cubic feet per day (MMcfe/d). This acquisition will be funded using approximately $65 million of the $305 million available under Whiting's $480 million credit facility.
The acquisition includes 58 producing wells in three major areas: the Labarge area including the Fontenelle, Bird Canyon and McDonald Draw fields; the Nitchie Gulch field and Siberia Ridge field. These fields are all located in the Greater Green River Basin of southwestern Wyoming in Lincoln, Sublette and Sweetwater Counties. These properties provide future development potential from increased density drilling and exploitation of multiple stacked pays.
The purchase and sale agreement is subject to standard conditions to closing, including Whiting's completion of title and environmental due diligence, with closing expected by the end of March 2005.
James J. Volker, Chairman, President and Chief Executive Officer of Whiting Petroleum stated, "This purchase fits our growth strategy of acquisition and exploitation and reflects our disciplined approach to adding quality reserves at attractive prices. These fields are an excellent fit within our Central Rockies core area. Our technical staff is experienced in the area. After closing, we plan to invest approximately $14 million over the next 36 months in the further development of these fields."
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