Independent exploration and development company Baseline Oil & Gas Corp. closed its acquisition of producing gas and oil properties in southern Texas from DSX Energy Limited LLP, Kebo Oil & Gas Inc. and 25 other related parties for an adjusted cash consideration of $96.6 million, the company said Tuesday.

The acquired properties consist of 2,374 net acres located within the Blessing Field in Matagorda County, TX. As of June 1, the effective date of the acquisition, the properties had independently engineered proved reserves of 42.2 Bcfe, including 8.1 Bcfe of proved developed producing, 13.0 Bcfe of proved developed nonproducing, and 21.1 Bcfe of proved undeveloped reserves, the company said. Approximately 77% of the total proved reserves is natural gas. Based upon the adjusted consideration of $96.6 million, the implied cost per Mcfe of proved reserves is $2.30, and $1.20 per Mcfe if probable reserves are included.

In addition to proved reserves, Baseline said it has identified an unrisked net 38 Bcfe of probable reserves. Net investment required to develop the probable reserves is estimated at $30 million.

The properties are located on trend with several prolific producing Frio fields, Baseline said. The Blessing Field has produced more than 300 Bcf of natural gas and 15 MMbbl of crude oil from 19 Frio sands. The previous owners drilled and completed 12 successful wells on the properties with a 100% success rate, Baseline said. The properties acquired by Baseline have established production in five separate fault blocks, with proved and probable reserves in 20 different horizons located at depths ranging from 8,000 to 12,000 feet.

Including the Blessing Field assets, Baseline now operates and holds a 100% working interest in 67.7 Bcfe of proved reserves. The company owns assets in the 4,600-acre Eliasville Field in Stephens County, TX, and a 19% nonoperated net interest in 171,000 gross acres in the New Albany Shale play in the Illinois Basin of southern Indiana. The company reported production of 10.5 MMcfe/d in August and said a very active drilling program throughout the remainder of the calendar year should result in significant production volume increases by year-end and into 2008.

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