Vintage Petroleum is paying $52.5 million for oil and gas producing properties and gathering and processing assets mainly in Duchesne and Uintah counties, UT, from El Paso Corp.

The agreement calls for Vintage to acquire an 80%, operated working interest in fields primarily covering more than 200,000 net acres. Current net production is 2,000 b/d of oil and natural gas liquids and 920 Mcf/d of gas from the Green River and Wasatch Basins.

Vintage said it believes the properties contain significant workover, drilling and waterflood potential, which it plans to pursue along with the implementation of operational efficiencies. In addition to the property interests, Vintage is to acquire the majority interest and operational control of three gas plants which will provide it with an increase in its natural gas gathering and processing income.

“These properties provide us with the type of operational and work program opportunities in which we have excelled historically. We are excited about operating in the Rockies and its potential to become a significant producing area for us,” said Vintage CEO S. Craig George.

As a result of the acquisition, Vintage is increasing its 2004 annual targets for cash flow from continuing operations to $230 million from $214 million and for operating income to $333 million from $315 million. The 2004 annual production target has been increased by nearly one million barrels of oil equivalent to 27.8 million boe. Its 2004 capital spending budget also has been raised by $15 million to $240 million.

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