EnCana Oil and Gas added to its Bossier Trend holdings Friday by purchasing 7,400 net acres in the Amoruso Field in Robertson County, TX, from Leor Energy for $242.9 million in cash and 4,039 net acres adjacent to Leor’s existing Amoruso Field leasehold. The two companies are working together, with EnCana as operator, and currently have seven wells producing 65 MMcf/d. Three more large gas wells that collectively tested at 65 MMcf/d await completion.

In July 2005, Leor and EnCana teamed up to explore and develop the Amoruso Field, which is contiguous to, and shares similar geological properties with, the Savell Field, a major gas reservoir currently producing more than 200 MMcf/d. The Savell Field was discovered by Burlington Resources, which was recently acquired by ConocoPhillips.

“There are numerous advantages to being joint owners with EnCana in the Amoruso Field, not the least of which is having one of North America’s leading natural gas producers as the operator of a drilling program which is expected to have eight rigs running by the end of the year,” said Leor Energy CEO Guma Aguiar. After the transaction, Leor said it will hold interests in 50,000 gross acres in Robertson County, TX, and 150,000 gross acres in the entire Deep Bossier trend.

In the Amoruso Field, Leor and EnCana have four rigs currently running and eight rigs expected to be operating in the next few months. The two companies expect to have 22 wells drilled by the end of 2006. They have incorporated significant changes in well drilling and completion techniques over the past year, leading to the success of three recently completed wells that tested at 32 MMcf/d, 19 MMcf/d, and 15 MMcf/d, respectively. The well that tested at 32 MMcf/d is currently producing from a single zone in the lower Bossier formation and Leor said it believes the well is among the most prolific onshore wells producing from a single zone in North America.

Leor said it used a portion of the proceeds from the deal to retire a $30 million 10% senior secured note due in 2008. With payment of the note, Leor has no outstanding debt on its balance sheet.

In its second quarter financial report, EnCana said it produced 96 MMcf/d of gas in East Texas, up slightly from the 90 MMcf/d it produced in 2005.

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