Concho Resources Inc., which last month agreed to buy privately held Permian Basin operator Marbob Energy Corp. for $1.65 billion (see Daily GPI, July 21a), on Friday said it is suing Apache Corp. and BP America Production Co. after the BP plc subsidiary elected to exercise preferential purchase rights under some of the Marbob operating agreements.
Marbob has around 100,000 acres in the Permian Basin of New Mexico in the emerging Bone Spring tight limestone and sandstone play. Concho is to gain around 166 million boe of estimated unproved reserves and close to 2,300 identified drilling locations with the purchase.
Concho noted that on the same day it executed a purchase agreement with Marbob, BP agreed to sell $7 billion worth of assets, including its Permian Basin acreage, to Apache (see Daily GPI, July 21b). “Certain of BP’s Permian oil and gas properties are subject to the same operating agreements from which BP derives its preferential purchase rights,” Concho said.
“BP’s preferential purchase rights arise as a result of the transactions contemplated by the definitive purchase agreement between Concho and Marbob,” Concho stated. “Concho believes that BP’s exercise of such preferential purchase rights relates to approximately $400 million of Marbob properties, predominately on the New Mexico Shelf.”
To date, said Concho, “BP has not provided Marbob with the preferential purchase right notifications required to be delivered pursuant to the applicable operating agreements. To protect Marbob’s preferential purchase rights, Marbob and Concho have initiated litigation in New Mexico state district court against BP and Apache’s subsidiary seeking a declaratory judgment and injunctive relief to compel BP to provide Marbob the preferential purchase right notifications required by the applicable operating agreements.”
©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |