XTO Energy Inc. said it closed its previously announced purchase of 732 Bcfe of estimated reserves from ChevronTexaco Corp. for $912 million. The "legacy properties" expand XTO's operations in its Eastern Region, the Permian Basin and Midcontinent area while opening new coalbed methane operations in the Rocky Mountains and a new operating region in South Texas. Beginning Aug. 16, the acquired properties will contribute production of about 88 MMcf/d of gas and 14,000 bbl/d of oil. About 87% of the reserves are proved developed with 47% of the reserves attributable to oil. XTO CEO Bob R. Simpson said the "watershed event sets the stage for years of continued profitable growth." XTO President Steffen E. Palko said the company anticipates a smooth transition of operations and immediate work on field optimizations. "With the company's current production growth goal of 28% to 30% this year and 18% to 20% in 2005, we can patiently integrate new drilling inventory into our long-term plans for double-digit organic growth."
Paramount Energy Trust said it closed a C$208.3 million purchase of natural gas properties in northeastern Alberta. PET financed the acquisition with a $144 million financing package with a syndicate of underwriters and with available credit facilities. Production from the acquired assets is 47.5 MMcf/d of natural gas and the acquisition increases PET's overall current production to 139 MMcf/d. It also increases the trust's total proved and probable reserves by 84 Bcf (43%) to 280 Bcf.
Houston-based integrated producer Southwestern Energy Co. is testing a new shale gas play on the Arkansas side of the Arkoma Basin. The company is drilling test wells targeting the Fayetteville Shale, an unconventional gas reservoir, ranging in depths from 1,500-6,500 feet. The Fayetteville Shale is a Mississippian-age shale that is the geologic equivalent of the Caney Shale found on the Oklahoma side of the Arkoma Basin and the Barnett Shale found in North Texas. The company has increased its acreage position in the area from 343,351 net undeveloped acres in 2003 to approximately 455,000 net undeveloped acres today. During 2002, the company obtained core samples of the Fayetteville Shale associated with the drilling of development wells in its conventional Fairway drilling program. The samples were analyzed for the critical shale properties associated with successful shale gas plays. The analyses indicated "encouraging" data relative to total organic content, thermal maturity and total gas content. Early this year, the company drilled two wells to sample the shale in areas with less well control and, in June, initiated a pilot well drilling program. Southwestern has recently drilled and completed four vertical wells in the Fayetteville Shale. The test wells are located in Franklin, Conway and Van Buren counties in Arkansas.
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