By OGJ editors
HOUSTON, Dec. 27 -- EXCO Resources Inc., Dallas, has agreed to acquire Anadarko Petroleum Corp.'s oil and natural gas producing properties, acreage, and other assets in Vernon and Ansley fields in Jackson Parish, La., for $1.6 billion. The transaction is expected to close in March, subject to customary approvals.
EXCO will acquire an average working interest of 91.1%, with an average 70.2% net revenue interest.
The acquisition consists primarily of proved developed producing gas properties, with current net production of about 190 MMcfd of gas equivalent from about 350 producing wells, of which 96% are operated. The properties produce from the Lower Cotton Valley formation.
Proved reserves are pegged at 466 bcf, of which 446 bcf is proved developed and 20 bcf is proved undeveloped. EXCO will continue evaluating the properties to identify additional exploitation and development opportunities.
Total acreage to be acquired is about 66,000 net acres, of which 15,000 net acres are undeveloped.
The acquisition also includes gathering systems, compression units, and treating plants.
In connection with the acquisition, hedges for a large portion of estimated production for 2007, 2008, and 2009 will be assumed by EXCO.
The acquisition will be financed with a new revolving credit facility and a bridge loan from EXCO's banking group. EXCO expects to finalize its financing plans in January.
EXCO Chief Executive Officer Douglas H. Miller said cash flow from the Vernon and Ansley assets will be used to accelerate development of EXCO's 1,100 drilling sites in the area and will also produce accelerated activity on its 85,000 net acres of undeveloped leaseholds.
In East Texas and North Louisiana, with the Vernon and Ansley assets, EXCO will have about 300 MMcfd of gas equivalent of current production and more than 1 tcf of proved reserves, the company said.
The company's total current production with the Vernon and Ansley assets will approach 400 MMcfd of gas equivalent and total proved reserves will be 1.8 tcf of gas equivalent.