By OGJ editors
HOUSTON, Nov. 5 -- EnCana Corp. agreed to acquire all of the Deep Bossier natural gas and land interests of privately owned Leor Energy in Texas for $2.55 billion.
"We are acquiring our partner's 50% interest in the prolific Amoruso field," said Randy Eresman, EnCana's president and chief executive officer.
Upon closing, EnCana will own 100% of Amoruso field in Robertson County, Tex. EnCana entered the Deep Bossier play in July 2005 by acquiring a 30% interest from Leor then increased its Amoruso interest to 50% interest in June 2006.
EnCana operates most of Amoruso field's 30 producing wells. Current production is constrained, but new processing capacity is expected to come on stream in December with the completion of a gas plant and a gathering system expansion.
Amoruso production is expected to reach more than 220 MMcfd by yearend and to average 315-355 MMcfd in 2008.
EnCana estimates the Deep Bossier lands acquired from Leor have 200 net well locations. Each well costs about $10 million to drill, complete, and tie in and is expected to recover 8-13 bcf. EnCana estimates a total cost of $3/Mcf.
When combined with EnCana's existing Deep Bossier interests, the company anticipates a total of 370 potential drilling locations.
The Leor acquisition also includes 9,100 net acres of offsetting land to the east at South Hilltop and about 20,600 net acres of undeveloped land in Robertson and Madison counties.