Fort Worth-based independent XTO Energy Inc. is acquiring some coalbed methane (CBM) properties in the San Juan Basin of Colorado for $160 million, after entering into a definitive agreement with J. M. Huber Corp. of Edison, NJ.

XTO’s CEO Bob R. Simpson estimated that the acquisition will increase the company’s 2003 gas production growth “beyond our organic target of 10-12%.” XTO engineers estimate proved reserves in the CBM assets are about 154 Bcf, and 79% are proved developed producing. The latest acquisition will add about 29 MMcf/d of long-lived gas production to the company’s rapidly growing production base.

“This transaction reinforces our ongoing commitment to provide a long-term growth strategy for XTO,” said Simpson, who added that the company plans to continue to target “add-on properties” in its core operating areas.

The assets to be acquired are located in the Ignacio Blanco Field in La Plata County of southwestern Colorado. Upon closing, XTO will increase its holdings in the San Juan Basin by 28,491 gross (15,982 net) acres. These producing properties contain 128 producing wells, which are situated on 160-acre and 320-acre spacing. The underlying assets expand the company’s exposure to the highly prolific Fruitland Coal formation, where XTO has significantly increased production and reserves in several fields in New Mexico.

According to Huber, 63% of the value is subject to a preferential purchase right. Closing of the transaction is scheduled for Dec. 30, 2002, with an effective date of Oct. 1, 2002, and is subject to typical closing and post-closing adjustments. The purchase will be funded through existing bank lines.

XTO’s properties are concentrated in Texas, Oklahoma, Kansas, New Mexico, Arkansas, Wyoming, Alaska and Louisiana.

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.