Just days after signing a farm-in agreement to develop some ExxonMobil Corp. properties in the Piceance Basin, XTO Energy Inc. on Tuesday said it had purchased some Permian Basin properties in West Texas and New Mexico from the oil giant for a closing price of $200 million.

Last week, XTO agreed to develop acreage in the northeastern portion of the Piceance Basin in northwest Colorado under a farm-in agreement with ExxonMobil (see Daily GPI, July 1).

XTO’s internal engineers estimate long-lived proved reserves to be about 21.1 MMboe, 75% of which are proved developed. The acquisition will initially add about 3,800 boe/d, of which 83% is oil. XTO, which will operate more than 70% of the properties, is targeting a 25% production rate increase over the next two years, and said the assets have a lease operating expense of about $7/bbl.

“This transaction highlights our ongoing focus in acquiring specific properties in regions where XTO has experience and a history of increasing production and reserves,” said CEO Bob R. Simpson. “In line with our 2004 acquisitions with both Exxon and ChevronTexaco, this Permian Basin package is an ideal overlay to our current operations. We continue to capture opportunities for XTO Energy that are consistent with our proven strategy of buying quality long-lived reserves, demanding strong economic returns and building a storehouse of substantial development upsides.”

The significant producing properties in the acquisition package include Vacuum Field in Lea County, NM and Cordona Lake Field in Crane County, TX. Vacuum Field contributes about 2,400 boe/d of production from multiple zones including the Morrow, Penn, Abo, Clearfork, San Andres and Grayburg formations. Cordona Lake Field produces about 900 boe/d from the Devonian formation. Other producing fields in the package include Goldsmith in Ector County, TX, St. Lawrence in Glassock County, TX and Blanco in Rio Arriba County, NM.

Based on the Jan. 1, 2005 effective date, the closing price was $200 million. Production volumes will be attributed to XTO beginning July 1, 2005. XTO expects to fund the purchase through a combination of cash flow and bank debt.

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