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Castle Acquiring Gas Reserves

Castle Acquiring Gas Reserves

Castle Energy Corp. of Radnor, PA, will pick up about 27.5 Bcfe of proved reserves, about 55% gas, when it completes the purchase of essentially all of AmBrit's oil and gas properties for about $22 million.

Castle is looking to make at least three more acquisitions the size of the AmBrit deal "as soon as possible" and is looking in the Lower 48 states, according to Joseph L. Castle II. The company essentially liquidated its reserves position in May 1997 with the sale of an East Texas property to Union Pacific Resources. With prices down and rates of return up, Castle sees this as the time to buy. The AmBrit assets include producing properties in Alabama, Louisiana, Mississippi, Montana, New Mexico, Oklahoma and Texas as well as un-drilled acreage in several of these states. The majority of the reserves are in South Texas. The deal brings Castle's reserves to 40 Bcfe, about two-thirds gas. Closing, subject to conditions, is expected by June 1. Castle Energy currently owns interests in about 300 oil and gas wells, primarily in the Appalachian basin and a gas sales contract with Lone Star Gas Co. Which expires May 31.

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