Dallas-based EXCO Resources Inc., which went public earlier this year, has completed its acquisition of Winchester Energy Co. Ltd. and its affiliated entities from Progress Energy Inc. for $1.16 billion. The purchase, announced in July (see Daily GPI, July 25), gives EXCO about 400 Bcfe in proved natural gas reserves, bringing its total proved reserves to 1.3 Tcfe. The purchase also included 330 Bcfe in probable and possible reserves in East Texas and North Louisiana and current production of 75 MMcfe/d from 588 producing wells in the Cotton Valley, Hosston and Travis Peak trends. In addition, it included about 775 drilling locations, 106,000 net acres of leasehold, six gathering systems with 300 miles of pipe and a 54-mile, 16-inch diameter transmission line with throughput of 115 MMcf/d, 35% of which is company owned.

For those looking for a detailed econometric analysis of the relationship between crude oil and natural gas prices, the Energy Information Administration (EIA) released a new 43-page analysis by EIA’s Jose A. Villar and Frederick L. Joutz of George Washington University. The report identifies a “significant stable relationship” between Henry Hub gas prices and West Texas Intermediate crude oil prices from 1989 through 2005. Oil prices are found to influence the long-run development of natural gas prices, but are not influenced by them. The dynamics of a “cointegrating relationship” between the two suggest a “one-month temporary shock to the WTI of 20% has a 5% contemporaneous impact on natural gas prices, but is dissipated to 2% in two months. A permanent shock of 20% in the WTI leads to a 16% increase in the Henry Hub price one year out all else equal.” For a copy of the report, go to https://www.eia.doe.gov/.

Calgary-based Pengrowth Energy Trust and cross-town Esprit Energy Trust have completed their business combination, after more than 99% of the unitholders voted to approve the deal. Esprit was spun off from the former Canadian 88 Energy Corp. in 2004 (see Daily GPI, Sept. 6, 2004). Pengrowth, which is one of the largest energy trusts in Canada, said it expects 4Q2006 production will average about 81,000 boe/d. The combined trust has total proved plus probable (3P) reserves of 300 million boe, weighted 51% to natural gas, with a reserve life of 10.6 years. The combined trust has a total of 683,000 net acres of undeveloped lands and development potential, including enhanced oil recovery in its focus area around Swan Hills, Judy Creek and Carson Creek, extensive shallow gas opportunities and coalbed methane resource development.

Tulsa-based Unit Corp. said subsidiary Unit Petroleum Co. is acquiring privately held Brighton Energy LLC for $67 million in cash. The acquisition includes about 27 Bcfe of proved reserves and 6 MMcfe/d of current production. The reserves are 78% natural gas and 67% proved developed. Most of the acquired reserves are located in the Anadarko and Gulf Coast basins of Oklahoma, Texas and Louisiana, with additional reserves in Arkansas, Kansas, Montana, North Dakota and Wyoming. Unit subsidiary Superior Pipeline Co. LLC also has completed its acquisition of privately held Berkshire Energy LLC for $21.7 million. Berkshire’s assets include a natural gas processing plant, gathering system with 15 miles of pipeline, three field compressors and two plant compressors. Current plant capacity is 15,000 Mcf/d, and it has system inlet volume of about 7,000 Mcf/d.

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