On the heels of the announcement that it had acquired a majority of TransCanada’s natural gas marketing business (see related story this issue), Atlanta-based Mirant Corp. reported that it has entered the production business by purchasing interest in 18 natural gas and oil producing fields as well as 206,000 acres of mineral rights in South Louisiana from Castex Energy Inc. for approximately $162 million.

Privately held Castex Energy — a Houston-based oil and gas producer — and a number of its affiliates will retain an interest in the properties and will continue to operate them, Mirant said.

“This initial transaction is important as it demonstrates our ability to partner with a strategic company like Castex and provide value for both parties,” said Richard J. Pershing, CEO of Mirant’s Americas business group. “This is part of our overall strategy to increase equity positions in producing properties.”

The acquisition, which has reached financial closing, is expected to contribute about $0.04 cents a share to earnings in 2002, further supporting earnings forecasts already made by the company.

Mirant — through its indirect wholly owned subsidiary Mirant Americas Production Co. — said it now owns an estimated 96 Bcf of proven oil and gas reserves, 82% of which are natural gas. The company reported that a substantial portion of the 38 MMcfe/d in current production is contracted to be sold at an average fixed price of $4 per million Btu through 2002.

The company said the acquisition also will produce added mineral royalty and bonus revenues from an interest in more than 206,000 acres of fee lands, where the rights are to the surface and minerals. Mirant and Castex said they have identified more than 200 low-risk opportunities where new wells can be drilled or where production at existing wells can be extended, allowing the companies to develop additional reserves.

“Castex has a demonstrated track record of low development costs, efficient operations and technical expertise, all of which attracted Mirant to this acquisition and expanded working relationship,” said Pam Pierce, CEO of the Mirant subsidiary.

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