XTO Energy Inc. has completed its purchase of producing properties from Plains Exploration & Production Co. for $336 million, further expanding its operations in East Texas and northern Louisiana. XTO's internal engineers estimate the proved reserves to be 175 Bcfe, of which 75% are proved developed and 95% are attributable to natural gas. Beginning Wednesday (June 1), the acquired properties will contribute production of about 35 MMcf/d, which is already reflected in the company's guidance. XTO agreed to the purchase earlier this year. With the purchase, XTO now holds acreage in the Sabine Uplift and Cotton Valley trends, which include the Carthage, Rosewood, White Oak/Glenwood, Beckville, East Henderson and Oak Hill fields. The original $350 million purchase price was reduced by $32 million of net revenues from a Jan. 1 effective date, offset by $18 million in capital expenditures, for a net reduction of $14 million, XTO said.
El Paso Corp. has sold its Lakeside Technology Center in Chicago to Digital Realty Trust Inc., which netted the company $140 million in cash at closing. The deal also offers the potential of additional payments to El Paso based on future rental opportunities and other considerations. The technology center houses a data center, telecommunications network carriers, and information technology service providers. It also serves as a major network distribution site. El Paso acquired the facility in 2001. The sale is part of El Paso's overall plan to reduce debt, net of cash to $15 billion by year end. Since its March 17, 2005 update, the company has announced or closed about $0.6 billion of its targeted $1.2-1.6 billion of asset sales.
Dallas-based Pioneer Natural Resources Co. said that it expects to recognize an aftertax gain of $75-80 million on the sale of its three Canadian oil and natural gas properties to Ketch Resources Ltd. Pioneer announced that it sold the Martin Creek, Conroy Black and Lookout Butte properties for $199 million to Ketch in April, part of a plan to shed its noncore assets by the end of 2005. As of the effective date of March 1, the properties' net proved reserves were estimated to be 9 MMboe, with current net production averaging 3,000 boe/d. Pioneer retained its core areas in Canada, the Chinchaga gas and the Horseshoe Canyon coalbed methane (CBM) gas fields. At Chinchaga, the company drilled 56 wells during its winter drilling campaign and has an inventory of locations remaining to drill in the future. Beginning this month, Pioneer plans to drill at least 80 wells to assess the potential of its extensive Horseshoe Canyon CBM acreage position.
Calgary-based Find Energy Ltd. is selling all of its properties in southeast Saskatchewan for C$28.5 million to an undisclosed buyer. The deal is expected to close by June 30. Production from the properties to be divested currently averages 580 boe/d, or about 16% of Find's production of 3,700 boe/d. The sale generates a value equal to 21% of Find's market capitalization, based on the May 31, 2005 closing price of C$4.09 per share. The sale price amounts to approximately C$49,150/daily flowing boe, $21.83/boe of proved producing reserves and C$11.40/boe of proved plus probable reserves. The divestiture also will reduce Find's estimated average unit operating cost by C $0.70/boe, or 8%. Find said that it operates only 47% of the southeast Saskatchewan assets and holds an average working interest of 38%. The divestiture will ease the company's administrative burden, it said, allowing more effort to be directed to its growth in natural gas and light oil production in the Pembina area of Alberta, where it operates all its lands and holds an average working interest of approximately 65%.
Petrofund Energy Trust said it purchased about 4 million boe in western Canadian gas and oil reserves (84% gas) through a combination of three property and corporate transactions for a total purchase price of C$66.4 million. The majority of the production is located in Alberta and British Columbia with minor interests in Saskatchewan. Current production is 1,365 boe/d and the trust said the assets fit closely with its existing operations. They also are complementary to Petrofund's internal development program and contain 12 drilling locations so far. The majority of the drilling is expected to take place in 2005 and 2006, the company said. Petrofund estimated the purchase price at C$16.55/boe of reserves and C$48,500/boe/d of production. The trust said the package is accretive under several measures, but is slightly dilutive in terms of reserve life index, which moves from 11.3 to 11.2 years. The purchases were financed using Petrofund's existing credit facilities. Proceeds of the C$75 million equity offering announced last week will offset the impact of the acquisitions on those credit facilities, the trust said.
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