Pogo Acquires San Juan Basin Gas Assets
Houston-based independent Pogo Producing Co. is acquiring some natural gas properties in the San Juan Basin in two separate transactions from unnamed sellers. With the two agreements, which total $189 million, Pogo will add an estimated 100 Bcfe along with current production of 15 MMcf/d.
Pogo said it would operate the properties, and it plans an "active" 2005-2006 drilling program with approximately 50 wells. The proven reserves have an estimated reserves-to-production index of 18 years, the company said. The first of the two acquisitions is expected to close on Sept. 1 and the second is expected to close in early December. The acquisitions will be financed with Pogo's existing credit facilities and cash.
"These transactions highlight our efforts to pursue value-creating domestic acquisitions," said CEO Paul G. Van Wagenen. "These particular long-lived assets bolster our growing San Juan Basin presence and fit well with our strategy of acquiring North American reserves."
In conjunction with these two transactions, Pogo acquired costless natural gas collars covering 15 MMcf/d for 2005 and 2006. Pogo entered into collars of $5.50 by $8.00/Mcf for 2005, and $5.00 by $7.50/Mcf for 2006.
With the latest transactions, Pogo will have acquired more than 150 Bcfe of proven reserves for $235 million this year. Currently, the producer owns interests in 93 federal and state Gulf of Mexico lease blocks offshore Louisiana and Texas, and also owns 804,000 gross leasehold acres in regions around the United States. It also owns property in the Gulf of Thailand, Hungary, Denmark and New Zealand.
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