Fort Worth, TX-based Range Resources Inc. has expanded its Barnett Shale holdings in sales agreements with a subsidiary of DTE Energy Co. and a private company for a total of $305 million. DTE had said Friday it would sell some of its Barnett stake to an undisclosed buyer (see Daily GPI, Dec. 10).
The newly acquired properties are located in the Texas counties of Tarrant, Denton, Johnson, Ellis, Parker and Hill. Current production is 14 MMcfe/d, which is expected to increase to 18 MMcfe/d early next year when several newly drilled wells are placed in production, Range said. The company said the properties to be acquired now have 51 producing wells, and another 183 drilling locations have been identified. Proven and unproven reserves are estimated at 334 Bcfe.
“Upon the closing of this transaction, Range’s position in the Barnett Shale will expand to 104,000 net acres and production will increase to over 90 MMcfe/d,” said CEO John Pinkerton. “Many of the properties to be acquired are in proximity to our existing leasehold position, and therefore we have a high degree of confidence in their productivity.”
The combined transaction is expected to close in January, and Range intends to initially finance the purchase by drawing on its bank credit facility. However, it also has identified “several noncore properties” in its existing property base that it plans to sell next year to fund the acquisitions. Production from the acquired properties is expected to offset production lost through these property sales, Range said. The assets to be sold were not disclosed.
“Similar to the $237 million of property sales completed in 2007, the divestitures contemplated for 2008 should serve to high grade our asset base and help fund capital expenditures,” said Pinkerton. “Importantly, with strong fourth quarter production growth, exceptional drilling results and the additional Barnett Shale properties to be acquired, Range is closing 2007 with considerable momentum. We are looking to 2008 with great anticipation.”
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