Orange, CA-based Capco Energy Inc. has signed an agreement to acquire for $10.5 million all the outstanding shares of Energy Reserves Group LLC (ERC), a Houston-based private limited liability company engaged in the business of oil and gas production and development. Capco will pay $3.25 million in cash and Capco stock, with the balance in the assumption of bank debt. The acquisition is expected to close within 30 days, pending approval. ERG’s current production is principally located in the Texas Gulf Coast and Wyoming, with production standing at 600 bbl/d and 1,400 Mcf/d. ERG has additional reserves that can be developed from its existing wells. Capco is a 20-year-old public company. In addition to exploration and production, the company’s other business interests are in petroleum marketing and propane distribution.

Calgary-based Provident Energy Trust on Wednesday reported that it has completed the acquisition of Richland Petroleum Corp. Approximately 99.5% of the Richland shares were voted in favor of the merger. Under the merger agreement, each Richland share received 0.4 of a Provident unit and one common share of Terraquest Energy Corp., a newly incorporated exploration and production company. Terraquest will be managed by certain former senior officers and directors of Richland and will hold approximately 91,0000 net acres of undeveloped land with production of approximately 200 boe/d. On completion of the transaction, Provident said its daily average production will increase to approximately 17,000 boe/d, comprised of 40% natural gas, 33% cold conventional heavy oil and 27% light crude oil and natural gas liquids. Provident called the Richland assets “very complementary” to its existing operations in west central Alberta and southeast Saskatchewan. The company said it will participate in the Terraquest upside by retaining an industry standard gross overriding royalty on certain exploration and development lands that are held by Terraquest.

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