El Paso Corp. has completed the acquisition of Peoples Energy Production Co. through indirect subsidiary El Paso E&P Co. LP, it said Friday. The total purchase price was $879.1 million in cash, which reflected customary closing adjustments.

The deal was announced in August (see Daily GPI, Aug. 20). It adds more than 600 proved and probable drilling locations in the ArkLaTex, Texas Gulf Coast, San Juan and Arkoma basins, and in Mississippi.

Peoples, a former subsidiary of Houston-based Integrys Energy Group, brings an estimated 305 Bcfe of proved reserves with current production of 72 MMcfe/d. About 42% of its properties are proved developed with a 12-year reserve life. Nearly 80% of the reserves are in El Paso’s core areas: 50% in the ArkLaTex region and 30% located along the Texas Gulf Coast. In the ArkLaTex, Peoples current output is 25 MMcfe/d; proven reserves are 146 Bcfe. Along the Texas Gulf Coast, production is 32 MMcfe/d and proved reserves total 98 Bcfe. The other properties produce a total of 15 MMcfe/d with 61 Bcfe of proved reserves.

“We’re pleased with the rapid completion of this acquisition, and we are also very pleased that many of the Peoples employees have chosen to join team El Paso,” said El Paso Exploration and Production President Brent Smolik. “The Peoples properties are an excellent strategic and operational fit for our company. In combination with our existing portfolio, they will improve the predictability of our future performance and add meaningfully to our inventory of future drilling projects.”

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