Continuing its current exploration and production acquisition strategy. Houston-based Rocky Mountain Energy Corp. (RMEC) said it has signed an agreement to purchase a group of oil and gas properties located in Wyoming, Utah, Nebraska and Colorado for $11.2 million.

The properties currently generate in excess of 240 b/d of oil and 2 MMcf/d of natural gas, equating to $400,000 per month net to interest purchased.

RMEC said proved reserves on the properties are 3.2 million boe with 95% of these reserves needing no further operations to produce cash flow. The company added that an additional 4 million barrels of oil ($20 million net) is thought to exist in waterflood potential. Closing is scheduled for April 1.

“The acquisition of these properties further demonstrates our commitment to our business plan and enables us to expand our portfolio of cash flow-producing oil and gas properties,” said John Ehrman, Rocky Mountain Energy’s CEO. “The cash flow represented in this transaction equates to approximately $0.07 cash flow per share. This is the fourth of five targeted cash flowing acquisitions which are designed to maximize shareholder value.”

Over the past couple of months, RMEC has announced three other cash flowing acquisitions (see Daily GPI, Dec. 4, 2002; Feb. 6, 2003). The first acquisition — located in San Juan County, NM — is producing 250 b/d of oil ($175,000 per month current cash flow). The second acquisition is currently generating $1.1 million per month, producing 750 b/d of oil and 5.5 MMcf/d (announced Feb. 24, 2003 and amended Feb. 26, 2003). The third acquisition is currently producing $150,000 per month.

The company noted that the total of these three properties is $1.425 million per month in current cash flow, or approximately 26 cents per share. The current announcement brings the total current cash flow of the acquisition properties to $1.825 million per month, or 32 cents per share.

“The four acquisitions currently subject to agreements for purchase represent a significant current cash flow,” Ehrman added. “The fifth acquisition target would, if successful, add to the above figure. Development of upside potential of over 250 billion cubic feet of gas and 10 million barrels of oil proved and probable reserves would further enhance that figure. We are positioning the company to generate significant current cash flow and enhance it by further development of the fields to increase the upside potential and maximize shareholder value.”

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