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Coastal Buys Mitchell Properties in CO, UT

Coastal Buys Mitchell Properties in CO, UT

Coastal Oil & Gas Corp.-on behalf of Coastal Oil & Gas USA LP - acquired properties in the Piceance Basin of Colorado and the Uinta Basin of Utah from Mitchell Energy & Development Corp.

The properties include 24,000 net leasehold acres (developed and undeveloped) with 36 wells and associated pipelines, gathering systems and production facilities. They are in the Hell's Hole Field in northwestern Colorado and Park Mountain Field in northeastern Utah. Production is about 6 MMcf/d. A Coastal spokesman declined to give information about reserves or price paid.

"These properties add to our growing asset base in Piceance and Uinta Basins and complement the acquisitions previously made in the area," said Coastal CEO David A. Arledge.

In June, Coastal Corp. subsidiary Coastal Field Services Co. announced the purchase of gathering systems and processing plants in northeastern Utah. Last November, Coastal Oil & Gas announced the purchase of upstream assets in northeastern Utah and western Colorado.

"With the sale of these properties, we have effectively exited the mid-continent region," said Mitchell CEO George P. Mitchell. "While sales proceeds initially will be used to pay down debt, we ultimately expect to re-deploy these funds in our core areas where we have an inventory of nearly 1,000 development wells and we can achieve higher returns on shareholder equity."

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