The Appalachian Basin consolidation trend continued yesterday asTwinsburg, OH-based North Coast Energy announced it has completedthe purchase of Peake Energy Inc. from North Canton, OH-basedBelden & Blake Corp. for $72.5 million. A spokesman from NorthCoast said the companies have been working on completing this dealfor the past three months. The purchase more than doubles NorthCoast’s production and reserves.

Peake Energy’s properties in West Virginia and Kentuckyrepresent approximately 81 Bcfe of proven natural gas reserves,1,900 wells and over 900 miles of natural gas gathering lines,including a 500-mile system serving West Virginia’s largestindustrial gas consumer, a Pechiney SA-owned aluminum plant inRavenswood, OH.

This transaction makes North Coast Energy one of the largestproducers of natural gas in the Appalachian Basin, the companysaid. North Coast’s assets in the Appalachian area now representapproximately 140 Bcfe of proven natural gas reserves, 4,000 wellsand 1,600 miles of natural gas gathering and transportation lines.Daily gross production will increase to over 33 MMcfe.

“The acquisition of Peake Energy provides North Coast an idealfoothold to expand our Appalachian operations, gas marketing, anddrilling and development opportunities,” said Omer Yonel, NorthCoast Energy’s CEO. “Peake’s low-risk core natural gas productionand development drilling are a perfect compliment to our existingresource base and growth strategy. In addition, Peake’s largeacreage position is ideally situated to explore the potentialrelated to the very large recent discoveries in West Virginia’sRome Trough.” Yonel said.

While North Coast is arriving on the scene, it still has a long wayto the top. Thanks to the recent purchase of Statoil Energy’sAppalachian assets (see Daily GPI, Jan. 5), Equitable Resources has laid claimto the title of chief producer in the region. Equitable’s Appalachianassets now include approximately 2.2 Tcf of proven gas reserves and12,600 natural gas and oil wells in West Virginia, Kentucky, Virginia,Pennsylvania and Ohio. The Statoil play added 1.2 Tcf of proven gasreserves and 6,500 natural gas wells.

Columbia Natural Resources is also another main player in theregion. Throughout its service territory, it holds 860 Bcf ofreserves, 8,000 wells and more than 5,400 miles of gatheringpipeline. Last August, CNR added to its reserve totals bypurchasing Appalachian assets from Pittsburgh, PA-based MeridianExploration Corp.

Players in the Appalachian Basin have been in a constant stateof flux over the past several months. Along with Statoil, MCNEnergy exited operations in the region earlier in 2000. With thelarge presence of these companies leaving the basin, opportunitiesexist for others to step in. Companies such as North Coast and apreviously announced joint venture between FirstEnergy and RangeResources called Great Lakes Energy Partners are attempting to doso.

“We’re in a position where continuing to grow is important,”said Gary Regan, a North Coast spokesman. “That being said, it isalso important to add value as we grow. We will continue to addthings to our plate, but we will highly scrutinize the assetsbefore doing so.”

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