EEX Corp. agreed to trade substantially all of its Permian Basinproperties in West Texas and Eastern New Mexico for the shallowwater properties located off the coast of Texas and Louisiana ofEnergen Resources Corp., the oil and gas subsidiary of EnergenCorp. In addition to the shelf properties, EEX will receive $9million in cash. “This trade is another step in our strategy toexit the onshore business and focus on offshore Gulf of Mexico.These new properties will improve near-term production of naturalgas and will contribute to improving our cost structure by loweringper unit production costs while eliminating overhead costs relatedto onshore properties,” said Tom Hamilton, EEX CEO.
In addition to cash, EEX will receive interests in 24 producingblocks and 30 exploratory blocks. Current average daily productionfrom the 24 producing blocks is about 21 MMcfe, and proved reservesapproximate 38 Bcfe. Energen will be receiving properties with anaverage daily production of about three thousand barrels equivalentand proved reserves of about 58 Bcfe. The transaction is expectedto close by Sept. 30 and has an effective date of Jan. 1, 1998.
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