Newfield Exploration Co. said it would buy interests inproducing gas assets in south Texas from an undisclosed seller for$142 million. The producing gas fields are located in Hidalgo,Brooks and Kenedy counties. The effective date of the transactionis Jan. 1, 2000 and the deal is expected to close in late February.

About 90% of the acquired reserves are natural gas. The threefields are currently producing about 75 MMcfe/d gross, or about 35MMcfe/d net to Newfield. The acquisition of certain of theinterests is subject to the waiver of preferential purchase rights.

“For some time we have been looking for the right acquisitionthat would grow our South Texas focus area. This deal will give usa significant increase in our 2000 gas production and provide cashflow to help fund our growing onshore U.S. Gulf Coast drillingprogram,” said David A. Trice, Newfield CEO.

Newfield will operate two of the three fields. It also hasidentified several locations on the acquired acreage that will bedrilled in 2000, it said.

Steve Campbell, a Newfield spokesman, said the plays have bothexploratory and production possibilities. The properties are alsoattractive because while Newfield is engaged in other drillingprograms in South Texas, such as a rapidly growing drilling projectin the lower Wilcox area near Victoria, Campbell said Newfield hadno drilling projects in the areas covered by the purchase.

The acquisition will be funded with cash and borrowings underNewfield’s revolving credit facility. After the transaction closes,the company estimates it will have about $100 million of unusedborrowing capacity.

Newfield is an independent oil and gas company active in theGulf of Mexico, along the U.S. Gulf Coast and off Australia. Forthe nine months ended last September, its revenues rose 32% to$191.7 million. Net income rose 47% to $16.6 million. Revenuesbenefited from increased production due to acquisitions ofinterests in two producing oil fields, the Houston-based companysaid.

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