Evergreen Resources, Inc. announced Thursday the acquisition of41,000 gross Raton Basin acres from Infinity Inc. affiliate, CISOil and Gas, for $8.5 million. Evergreen estimates this additionwill increase its coal-bed methane proved net gas reserves by 22.5Bcf. The company now holds working majority interest in 200,000acres in the basin. The effective date of the transaction was Dec.31, 1998.

“The economics of the deal made sense,” said Kevin Collins, anEvergreen spokesman. “We never want to overpay for property, andthe 37-38 cents per Mcf that we paid for this property is prettymuch in line with other acquisitions we’ve made in the past.”Collins added there is a possibility for more Raton Basin expansionin the future, but would not give details.

The purchase included 450,000 shares of Evergreen common stock,$250,000 in cash, and the assumption of $750,000 in debt. Onecompressor and several miles of gathering lines were included inthe deal. The transaction involved two areas; the Long Canyon andthe Lorencito Canyon. Evergreen and CIS jointly bought the landlast year, with CIS holding 75% interest in the Long Canyon and 65%in the Lorencito area. The transaction increased Evergreen’sinterest by 50% in the Long Canyon and 18% in the Lorencito to giveit majority control for all the acreage.

The company said only 17 wells are currently producing 1.5MMcf/d of gas in the 41,000 acres. Evergreen said it identified 160potential drilling locations on the acreage. Evergreen’ssubsidiary, Primero Gas Marketing, will market all the gas producedfrom the properties and will be responsible for costs to construct,own and operate gathering, dehydration, and compression. Evergreenwill also serve as operator of the territories.

The Raton Basin is located in Southwest Colorado. It holds anestimated eight to 10 Tcf in coalbed methane gas. BesidesEvergreen, Stroud/KLT and Petroglyph are also developing the area.By 2002, Coastal estimates 135 MMcf/d will be produced from thebasin.

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