Patina Oil & Gas boosted its proved gas reserves 20% Monday with the purchase Denver-based Cordillera Energy Partners LLC, which includes 235 Bcfe of proved reserves, for $240.5 million of cash plus five-year warrants to purchase 500,000 shares of Patina common stock at a price of $45 a share. Patina shares currently are valued at $35.17. Cordillera’s principal shareholder is EnCap Investments LP.

The reserves being acquired are 93% natural gas and located primarily in the Anadarko and San Juan Basins. Net daily production from the properties currently exceeds 30 MMcfe, including 27 MMcf/d of gas and 600 bbl/d of oil.

Patina said the acquisition will be immediately accretive to earnings and cash flow. The purchase is scheduled to close on Oct. 1 and is expected to be funded with borrowings under Patina’s bank facility.

“The Cordillera acquisition represents the largest purchase in our history and has substantial strategic value,” said Chairman Thomas J. Edelman. “It not only adds materially to our operating base in the Midcontinent, it establishes a third core area in the San Juan Basin. The purchase will immediately add almost a quarter of a Tcfe to our proved reserves, increase production by more than 30 MMcfe a day and contribute significant growth potential.

“In combination with the substantial inventory of high return development opportunities we hold in Wattenberg and the Midcontinent, the acquisition positions Patina to continue to deliver significant production growth and superior performance for the foreseeable future,” he said.

The properties being purchased include interests in 600 currently producing wells in the Anadarko Basin of western Oklahoma and the Texas Panhandle, the San Juan Basin within Rio Arriba and San Juan Counties of New Mexico and, to a lesser extent, the Permian Basin. Over 85% of the reserve value is operated. The properties are believed to have significant development potential and generally produce from tight sand formations, providing opportunities for Patina to apply its expertise in fracture stimulation.

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