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Coastal Adds Midcontinent Reserves

Coastal Adds Midcontinent Reserves

Coastal Corp. subsidiary Coastal Oil &amp Gas bought oil and gas assets of Conoco in the Uintah Basin of northeastern Utah and the Piceance Basin of western Colorado. The properties are in two of the most prolific gas basins in the Rocky Mountains. Proved reserves are estimated at 500 Bcfe, about 95% gas.

Coastal is acquiring interests in 21 producing fields and an estimated 312,500 acres of producing and non-producing leasehold interests. The leaseholds include 106,000 acres of prospective deep rights under and adjoining the Natural Buttes Federal Exploratory Unit, which Coastal currently operates in Uintah County, UT. Additionally, Coastal will acquire Conoco's Dragon Trail processing plant which is capable of processing up to 60 MMcf/d. The plant is about 15 miles south of Rangely, CO. Other assets included in the acquisition include two gas gathering systems. They are the Ouray system in the Ouray Field in Uintah County, UT, and Dragon Trails in the Douglas Arch area of Colorado. Ouray has throughput of 5 MMcf/d, and Dragon Trails has throughput of 30 MMcf/d

"These properties are an excellent fit with Coastal's integrated North American natural gas strategy," said David A. Arledge, CEO. "Coastal has significant existing natural gas reserves in the area, as well as an extensive transportation system with our Colorado Interstate Gas Co. pipeline subsidiary. As a result, we can leverage both our geological expertise and our drilling programs to expand our exploration and production core area in the Rockies to an adjoining basin in a prudent manner. With this acquisition, we have the opportunity to drill more than 500 potentially productive locations that are economically attractive at today's gas prices."

Joe Fisher, Houston

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