Exco to buy US Midcontinent assets from Anadarko for $860 million

By OGJ editors
HOUSTON, Feb. 2 -- Dallas independent Exco Resources Inc. reported it will acquire producing oil and natural gas properties, acreage, and other assets in several fields in the US Midcontinent, South Texas, and Gulf Coast areas of Oklahoma and Texas from Anadarko Petroleum Corp. for $860 million in cash.

The acquisition includes assets in the Golden Trend, Watonga-Chickasha, Mocane-Laverne, and Reydon areas in Oklahoma, and the Felicia, Speaks, and Cage Ranch areas of South Texas.

This acquisition includes producing properties with net production at yearend 2006 of about 103 MMcfd of gas equivalent from about 1,327 producing wells. Production consists of about 50 MMcfd of gas equivalent from 1,062 wells in the Midcontinent, and 53 MMcfd of gas equivalent from about 265 wells in South Texas.

Average acquired working interests and net revenue interests are 75% and 59% in the Midcontinent, and 63% and 49% in South Texas, respectively.

Proved reserves of the assets total more than 400 bcf of gas equivalent and are 72% proved developed and 87% gas. Exco has identified about 200 proved undeveloped drilling opportunities in the package, with 88% of the opportunities in the Midcontinent.

The Midcontinent assets contain about 76% of the total proved reserves in the transaction. The reserves are in multiple formations, including the Big 4, Bromide, Springer, Morrow, Chester, Tonkawa, Redfork, and Granite Wash in the Midcontinent, and the Frio, Vicksburg, Miocene, Yegua, and Wilcox in South Texas.

About 91% of the estimated value of the Midcontinent reserves are operated, while about 85% of the estimated value of the reserves in South Texas are operated. Net acreage included in the acquisition totals about 290,000 acres, more than 71% of which is in the Midcontinent.

The Oklahoma assets being acquired bring Exco's overall Midcontinent production to more than 75 MMcfd of gas equivalent, the company said.

The transaction is expected to close in April, subject to closing and governmental clearance.

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