Chevron has agreed to transfer all of its oil and gas assets inUtah’s Uinta Basin to Shenandoah Energy, a new company created byThe Chandler Company, in exchange for an equity ownership interestin Shenandoah and an undisclosed amount of cash. Shenandoah alsowill acquire all of Chandler’s stock. The transactions will have aneffective date of July 1, and are expected to close by Nov. 30,subject to certain conditions and approvals.

“This transaction will create a sizable platform with a wellcapitalized balance sheet from which to pursue additional growthopportunities within the Rocky Mountain region,” said Mitch Solich,president and CEO of Shenandoah and Chandler’s current CEO.

Peter Robertson, president of Chevron U.S.A. Production Co. saidthe transaction “optimizes the development of these assets. Chevronwill retain an interest in the Utah operations while freeing upmuch of the asset value to invest in growth opportunitieselsewhere.”

Chevron’s assets include those in Red Wash, Wonsits Valley,Gypsum Hills and the Brennan Bottom Unit areas. Total Chevronproduction in the region averages 2,280 b/d of oil and 5.9 MMcf/dof gas. Chevron currently employs 36 people in the Uinta Basin.These employees will have the opportunity to compete for jobs inShenandoah or possibly be reassigned to other Chevron operations,the company said.

Chevron and Chandler’s shareholders each will receive an equityownership interest in Shenandoah and an undisclosed amount of cash.In conjunction with the acquisitions, Shenandoah has entered into along-term crude oil supply agreement with Chevron Products Companyto provide feedstock for Chevron’s Salt Lake City, UT, refinery.

Shenandoah will have pro forma proved reserves of 238.5 Bcfe ofgas, consisting of 122.7 Bcf of gas and 19.3 million bbl of oilwith an estimated reserve life of 25 years. Of these provedreserves, 96% will be in the Uinta Basin. Shenandoah’s assets alsowill include interests in the Lorencto Field and in Sarcillo Canyonin the Raton Basin, where the company intends to develop coal bedmethane gas reserves. Shenandoah will be headquartered in Denver.

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