A subsidiary group of Merrill Lynch & Co. Inc. has invested $150 million into privately held Leor Exploration & Production LLC, giving it an undisclosed stake in the Houston-based producer. Leor is targeting natural gas in the Deep Bossier trend of Texas and Louisiana.
The equity placement with Merrill Lynch PCG follows the recent closing of a $150 million three-year revolving credit facility with JPMorgan Chase Bank NA, Leor said in a statement. Goldman Sachs also is an investor. Leor management controls 83% of the company.
"Following so soon after the initiation of an attractive new banking facility with JPMorgan Chase, we are delighted to have Merrill Lynch join Leor as a major equity participant," said Leor Chairman Thomas S. Kaplan.
According to Leor CEO Guma Aguiar, the new funds "will provide sufficient capital for Leor's drilling program and operations throughout 2007. Leor expects to use the bulk of the proceeds from this equity transaction to accelerate ongoing development of our company's flagship project in the Amoruso Field and also to continue our exploratory program in the Deep Bossier trend."
In December, Leor said gas production from the Amoruso Field exceeded 90 MMcf/d gross, up from 7 MMcf/d in April 2006. Including its interests in the Amoruso, which is operated by a subsidiary of EnCana Corp., Leor holds interests in more than 150,000 acres in the Deep Bossier.
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