By OGJ editors
HOUSTON, Nov. 11 -- Vintage Petroleum Inc., Tulsa, plans to acquire producing oil and natural gas properties in the Uinta basin of Utah from various subsidiaries of El Paso Corp., Houston, for $52.5 million.
The agreement calls for Vintage to acquire 80% operated working interest in fields primarily in Duchesne and Uintah counties. The properties cover more than 200,000 net acres.
Subject to customary closing adjustments, the transaction's effective date is slated to be retroactive to June 1.
Current net production attributable to the properties is estimated at 2,000 b/d of oil and natural gas liquids and 920 Mcfd of gas from the Green River and Wasatch formations. Vintage said the properties offer workover, drilling, and waterflood potential.
In addition to the producting properties, Vintage is to acquire majority interest and operational control of three gas plants.
"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 this acquisition, Vintage increased its 2004 targets for cash flow from continuing operations to $230 million from $214 million. The 2004 production target was increased by nearly 1 million boe to 27.8 million boe.
The capital spending budget increase of $15 million will be allocated to US exploitation spending, bringing the 2004 capital spending budget to $240 million. The revised 2004 targets are based on average prices of $27/bbl and $5/MMbtu of natural gas on the New York Mercantile Exchange, the company said.