Daily GPI / NGI All News Access

Goodrich Sells South Louisiana Assets to Focus on Cotton Valley

With a plan to concentrate its exploration and development efforts on the emerging Cotton Valley trend of East Texas and northwestern Louisiana, Houston-based Goodrich Petroleum Corp. agreed Tuesday to sell nearly all of its South Louisiana assets to an undisclosed buyer for $100 million.

Goodrich's South Louisiana operations, located mainly along the coast, include the Burrwood/West Delta 83, Lafitte, Second Bayou, St. Gabriel, Plumb Bob, Ada, Lake Raccourci and Pecan Lake fields. Goodrich said it will sell 41 Bcfe of proved reserves, of which nearly half (44%) are producing. In December, the assets to be sold were producing at an average rate of 13,000 Mcfe/d net at a sales price of about $2.44/Mcfe of proved reserves, or $7,700/Mcfe flowing.

The purchase, with an effective date of July 1, 2006, is expected to close by Feb. 28. Goldman Sachs acted as adviser to Goodrich on the sale.

CEO Gil Goodrich said the transaction "will allow us to complete our strategic shift into the Cotton Valley trend, which has been our primary focus for the last three years..." When "combined with our capital raising activities in the fourth quarter of 2006, we are now extremely well positioned to fund our 2007 capital expenditure budget of $275 million, as well as maintain a conservative debt to capitalization ratio."

The Cotton Valley formation is predominately natural gas with 8-10% porosity. At the end of 2005, about 71% of Goodrich's proved reserves were in the trend, and it spent 85% of its 2005 capital expenditures there. In two transactions late last year, Goodrich expanded its Cotton Valley acreage to 160,000 gross (103,000 net) acres (see Daily GPI, Nov. 28, 2006).

In East Texas, Goodrich holds leases in the Dirgin-Beckville, North Minden and Tortuga Grand fields that total around 135,000 gross acres, including 88,000 that are company-operated (90% average stake) and 47,000 nonoperated (40% average stake). In North Louisiana, Goodrich controls 18,000 gross acres in the Bethany-Longstreet field in DeSoto and Caddo parishes (70% working interest) and 21,000 gross acres in the Alabama Bend field of Bienville Parish.

©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus