Evergreen Adds to Dominant Position in Raton Basin
Evergreen Resources grabbed another 17,800 acres of coalbed methane properties, representing about 40 Bcf of proven reserves in the southern Colorado portion of the Raton Basin for $19.2 million from Shenandoah Operating Co. The purchase brings Evergreen's total gross acreage position in the Raton to 265,000 acres.
The acquired properties are currently generating daily net gas sales of about 2.5 MMcf/d from 65 producing wells. Prior to the acquisition, Evergreen's daily net gas sales were averaging 80 MMcf/d from about 560 net producing wells. The acquisition also includes additional interests in an existing compressor station and associated gas collection system.
"This transaction represents another opportunity for Evergreen to strengthen its already dominant position in the Raton Basin," said Evergreen CEO Mark S. Sexton. "We currently produce more than 75% of the natural gas from the basin. With the purchase of these additional interests, we now operate and control all of our production and proven reserves. We see numerous opportunities to increase production from this area by focusing on recompletions and workovers to existing wells. The average well in this area is producing substantially below the average Evergreen-operated well in the Basin."
Evergreen anticipates additional drilling on the acquired properties in 2002 through 2004. So far this year, Evergreen has drilled 84 wells in the Raton Basin and is on track to meet its expanded goal of drilling 130 to 140 wells in the Basin during 2001.
Of the reserves acquired, 63% are classified as proved developed and 37% are classified as proved undeveloped. All of the estimated reserves are assigned to the Vermejo group of coals. Additional potential exists in deeper formations, which are currently unproven.
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