Union Pacific Resources Group agreed to pay about $59 millionfor Occidental Petroleum’s interests in four oil and gas fields insouthwest Wyoming, 23 producing wells in Louisiana, increasedownership in the Masters Creek Gas Plant and nearly 127,000 netacres in the Louisiana extension of the Austin Chalk trend.
In the Rockies, UPR’s primary interest is in Occidentalproperties in the Wamsutter and Overthrust areas. The Louisianaproperties will expand UPR’s presence in what is a core area forthe company.
“These properties represent an opportunity for UPR to build onits well established presence in southwest Wyoming and theLouisiana extension of the Chalk,” said Jack L. Messman, UPR CEO.”With the low cost and long reserve life of the Rockies properties,combined with the additional production and drill sites in bothWyoming and the Chalk, these properties are a good strategic fitfor us and will allow us to continue to profitably grow ourproduction in these core areas.”
In Wyoming, the four properties contain 31 producing wells,which are producing a net average of 256 barrels of oil per day(Bo/d) and 8.5 MMcf/d of gas. The wells’ net reserves are about 36Bcfe. UPR has identified 21 possible drilling locations that havereserve potential of about 22 Bcfe.
When the transactions are completed, UPR will operate and own a100% working interest in the eight Wamsutter wells that werepurchased. The Overthrust wells, which include 19 producing wellsand eight nitrogen injection wells, are in the East Painter Unit.The acquisition increases UPR’s working interest in the EastPainter Unit to 19%.
In the Louisiana extension of the Austin Chalk, UPR will buy 23producing wells with an average working interest of about 58%. Inaddition, UPR will acquire Occidental’s 2.5% interest in theMasters Creek Gas Plant, 100% ownership of the Occidental CentralFacilities and nearly 127,000 net acres of land. Of the 23 wells inwhich UPR will purchase an interest, the company previouslyoperated 11 of the wells and took over as operator on the remaining12 wells on April 1, 1998.
Daily production from the Louisiana wells is estimated at 21MMcfe/d. UPR also projects 16 additional drill sites in the areathat have reserve potential of about 34 Bcfe. Net proved producingreserves are about 14 Bcfe. With the addition of Occidental’sinterest in the Masters Creek Gas Plant, UPR’s total interest inthe plant will be about 65%.
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