CNG Buying Share in South Texas Fields
Consolidated Natural Gas Co. E&P subsidiary CNG Producing
Co. agreed to buy interests in Lopeno and two adjacent South Texas
gas fields. Earlier in the year, CNG Producing bought about a 50%
interest in the Lopeno field, and together with the most recent
purchase, CNG Producing will own nearly 100%. On a combined basis,
the company will pay $125 million for the two transactions.
Lopeno and the adjacent fields, located in Zapata County, TX,
contain 50 active wells with current working interest production of
56 MMcf/d. The final transaction should be closed by late summer.
"Lopeno is a relatively new field with long-lived reserves that
provide a nice balance to our Gulf of Mexico base," said Pat Riley,
president of Pittsburgh-based CNG Producing. "The field has
numerous development drilling opportunities that will help us to
sustain our production growth objectives while maintaining one of
the lowest cost structures in the industry."
As a result of the acquisitions, CNG's exploration and
production capital spending in 1999 will increase to about $465
million, up $139 million from the originally approved budget of
"We are using CNG's financial strength to take advantage of
opportunities we see in exploration and production," Riley said.
"While many other companies have curtailed capital investments in
1999, we have increased our spending to take advantage of the
current environment. At $465 million, CNG will have one of the five
largest domestic E&P budgets in the country for an independent
oil and gas company."
CNG is now targeting 1999 production at 250 Bcfe, about 25%
above 1998's record production level. The increase is attributable
to new production from the Nautilus/Nemo/Atlantis complex in the
Gulf of Mexico, which came on line during the first quarter;
additional production from the previously announced West Cameron
Block 76 field development wells in the Gulf of Mexico; as well as
the South Texas acquisitions.
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