BP Amoco strengthened its position as North America’s No. 1 gasproducer through a $500 million deal to buy a significant part ofRepsol-YPF’s holding in Crescendo Resources, a major gas producerand processor in Texas and Oklahoma.

“It improves our leadership position in gas in the ‘Lower 48’states and we can anticipate further opportunities for strategicgas investments,” said Richard Olver, chief executive ofexploration and production at BP Amoco. “This move will double BPAmoco’s share of gas production from the Anadarko basin to about180 MMcf/d as well as adding about 15,000 barrels a day of liquidsproduction. It demonstrates our commitment to increase our gasposition through strategic acquisition as well as organic growth.Prior to combining with Amoco less than a year ago, BP’s net gasproduction in the USA was just over 90 MMcf/d. Our total US gasproduction is now 2,400 MMcf/d.”

“This transaction is a major step in deepening our leadershipposition in the Anadarko, a key natural gas producing area,” saidIain Conn, vice president for BP Amoco’s Midcontinent business unitbased in Houston. “The Crescendo partnership with Repsol-YPF hasdelivered good results and the addition of these assets builds onthe tremendous success that we already enjoy in onshore gas.”

BP Amoco’s growing momentum towards gas production increasedfollowing a review of the company’s upstream portfolio after themerger with Amoco was completed. BP Amoco’s worldwide gasproduction currently stands at more than 5,900 MMcf/d, comparedwith 5,300 MMcf/d a year ago.

“The first conclusion that I would draw to you is natural gas iscore to BP Amoco because we believe it’s a very profitable part ofour portfolio, but it also fits with our strategy around a cleanerfuels mix. We think we’re good at it.”

Crescendo Resources, LP is a joint venture involved in theproduction of gas and NGLs in the Texas panhandle and westernOklahoma area of the Anadarko basin. BP Amoco holds 41% interestand Repsol-YPF holds the remaining 59%. Crescendo was created in1997 and is headquartered in Amarillo, TX. Daily production is 235MMcf of gas and 25,000 barrels of natural gas liquids. Crescendohas proved gas reserves of about 1.2 Tcf. Its assets include 5,500wells, a 2,200-mile gathering system and two gas processing plantswith a capacity of 230 MMcf/d. The remaining part of Repsol-YPF’sstake in Crescendo will be marketed in a package of assets inNovember. Petrie Parkman and Co. is assisting Crescendo in themarketing effort.

“We see that package as being of great interest to a lot ofcompanies,” Conn said. Production from the properties is roughly 55to 60 MMcf/d. “It will have some significant proved reserves. Itwill be a big piece.”

The BP Amoco-Repsol-YPF transaction is subject toHart-Scott-Rodino approval and is targeted to close by year-end.

Joe Fisher, Houston

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