By OGJ editors
HOUSTON, July 24 -- Exco Resources Inc., Dallas, plans to buy Winchester Energy and its associated gas businesses from Progress Energy, Raleigh, NC, for $1.2 billion. All of the assets being acquired are in East Texas and Louisiana.
The transaction, expected to close on Oct. 2, remains subject to customary closing provisions. The divestiture is part of Progress Energy's plans to reduce company debt.
Winchester Energy is the parent of Winchester Production Co., Westchester Gas Co., Texas Gas Gathering, and Talco Midstream Assets.
The acquisition involves both producing and undeveloped gas properties. Currently, the assets are producing 75 MMcfd of gas equivalent from 588 wells. The acquisition also includes six gathering systems with 300 miles of pipeline.
The properties are in Cotton Valley, Hosston, and Travis Peak trends. Estimated proved reserves are 400 bcf, probable reserves are 300 bcf, and possible reserves are 30 bcf. Properties include 775 drilling locations, 33% of which are proved, and 106,000 net acres of leasehold.