Amoco Focuses on WY, Swaps With Snyder
Amoco Corp. and Snyder Oil Corp. traded interests in Wyoming
properties to help each company focus its gas businesses in the
state's Green River Basin. Amoco acquired Snyder's interest in a
substantial portion of the Jonah field in Sublette and Sweetwater
counties in Wyoming. In exchange, Amoco gave Snyder 75% of its
interest in the Beaver Creek Unit in Fremont County, WY. Amoco
retained 25% interest in Beaver Creek. The deal is the capstone on
Amoco's year-long divestiture plan.
Last year, Amoco said it would sell up to one-third of its
domestic oil and gas holdings to focus on its most profitable
operations in the United States and abroad. Amoco said it received
about $1.9 billion from the divestitures. The Snyder deal wraps the
"Amoco is excited about the acquisition of additional interests
in the Jonah field in the Green River Basin, which is one of the
core areas of Amoco Energy Group North America," said Richard
Flury, executive vice president of Amoco's exploration and
In 1996, Amoco acquired 50% of Snyder's interest in the Jonah
field. This deal increases its interest in key areas of the field.
Amoco and Snyder wells recently drilled in the Jonah field have
initial sustained production rates of more than 10 MMcf/d.
Production in the field is approximately 160 MMcf/d gross.
Between September and May, 37 wells have been drilled in the
Jonah field. "We've been stopped by environmental impact statement
requirements from the Bureau of Land Management," said Amoco
spokesman John Lloyd. "We just got that cleared up, and we're going
on with our drilling plan. The current plan is to have 20 to 25
wells drilled throughout the remainder of 1998. The net right now
to Amoco in Jonah is 14 MMcf/d, and we expect that to double to
about 28 MMcf/d by the end of the year." Estimates of reserves were
The trade also resolves litigation concerning Amoco's prior
agreement to sell the Beaver Creek assets to Howell Petroleum Corp.
Howell and Amoco terminated the purchase and sales agreement for
Beaver Creek, with Howell agreeing to purchase Amoco's interests in
other outside operated properties in Utah and Wyoming. Snyder had
sued Amoco and Howell to block the Beaver Creek sale, saying it had
preferential rights to the Beaver Creek assets.
In other news, Snyder signed an agreement with Texaco covering
six prospects in the Flex Trend area of the Gulf of Mexico. Under
the agreement, Snyder will obtain working interests ranging from
22.5 to 30% in prospects in East Breaks, Garden Banks and
Mississippi Canyon. Snyder expects to invest $25 million in 1998 on
these prospects through a continuous drilling program slated to
begin late next month.
The company said planned 1998 exploration and development
expenditures have been increased by 40% to $200 million, reflecting
Snyder's growing portfolio of opportunities in the Gulf. This year,
Snyder completed agreements with Shell, British-Borneo and now
Texaco, to participate in the exploration of eight prospects in
water depths ranging from 1,000 to 2,500 feet.
"Participating in these projects allows us to utilize our strong
capital base today, and still maintain our financial flexibility to
do high impact acquisitions that fit our operating and growth
strategies," said John C. Snyder, Snyder CEO. "With the
potentially attractive rates of return afforded from these
prospects, we will be shifting some capital from our acquisition
budget to these opportunities."
Joe Fisher, Houston