PRB Energy Inc. of Denver acquired about 630 coal bed methane wells on 29,500 acres from Pennaco Energy Inc., also of Denver. PRB is the principal gatherer serving the wells.
Many of the wells are shut-in. Fewer than 200 are producing between 2.5 to 3 MMcf/d. PRB said it plans to bring shut-in wells back to a productive status.
“This transaction should enlarge our revenue base immediately as well as offer PRB significant upside potential as we seek to expand gas volumes for our GAP and Bonepile gathering systems and eventually reactivate as many shut-in wells as possible,” said PRB CEO Robert Wright. “Longer term, we expect to initiate drilling of approximately 300 Moyer coalbed methane wells on the newly acquired acreage.
“PRB has made a very promising acquisition, but the true potential of the acquired assets will take time to assess. The magnitude and timing of increased gas volumes from the acquired wells are still to be determined, as are the costs associated with well-remediation. These are several of the factors that make forecasting difficult at this time. It is our belief that by the end of the third quarter, we will have an understanding of the growth potential of the properties and should be in a far better position to provide updated 2006 guidance.”
Wright said the company has a contract to acquire about 70 miles of gathering lines in the Recluse area, which will give it gathering opportunities on more than 100,000 acres. “We will also seek out working interests in this area to complement our gathering operations,” Wright said. This gathering acquisition is scheduled to close in mid-July.
PRB is active in the Rocky Mountain states in oil and gas exploration and development and provides gas gathering, processing and compression services on properties it operates and for third party producers.
In September 2005, PRB Gas Transportation Inc. and Calgary-based Enterra Energy Trust finalized an agreement to develop coal bed methane properties in an area of mutual interest in Wyoming and Montana (see Daily GPI, Sept. 8, 2005). As reported in July (see Daily GPI, July 13, 2005), PRB has the right to earn up to a 50% working interest in certain properties of Enterra subsidiary Rocky Mountain Gas (RMG).
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