The New York Mercantile Exchange Inc. (Nymex) announced Monday that it will list an option on the October 2007/January 2008 intermonth spread for natural gas calendar spread options contracts, beginning Tuesday. This is in addition to the current listing of 24 consecutive options on one-month spreads. Options on spreads between the first and third nearby months, the first and fourth nearby months, the second and fourth nearby months, as well as the spreads between the first nearby June to the first nearby December, first nearby December to first nearby June, the first nearby December to the second nearby December, first nearby October to the first nearby January, the first nearby April to the second nearby October and the first nearby October to the second nearby April contracts will continue to be listed for natural gas calendar spread options.
Cano Petroleum Inc. said Monday that a wholly owned subsidiary has closed an acquisition of producing oil and gas properties in the Texas Panhandle Field for a purchase price of $24 million. Texas-based Cano said the acquisition adds 400 net Boe to the company’s daily production and 7 million Boe to its proved reserves, of which 2.1 million Boe are proved producing. The properties cover 9,700 acres and include two workover rigs and other equipment valued at $1.25 million. Cano said the properties offset existing production and are intended to be incorporated into existing operations without any measurable increase in general and administrative costs. The effective date of the acquisition was Feb. 1 and the acquisition was funded through an existing credit facility with Union Bank of California. As a part of the financing terms, 50% of the newly acquired production will be hedged with a floor price of $60/bbl of oil and $7.60/Mcf of natural gas during the three-year period beginning May 2006. The three-year hedge does not have a ceiling price, which would limit the upside potential in the event that oil prices increase. “This acquisition, at a cost of $3.25 per BOE of proved reserves, constitutes further evidence of Cano’s ability to identify and target acquisition opportunities within our core areas which provide excellent operational synergies, efficient use of existing infrastructure and personnel, and meaningful reserve and production accretion,” said Cano CEO Jeff Johnson.
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