Heartland Oil & Gas Corp., Vancouver, BC, signed a letter of intent to acquire the northeastern Kansas Forest City basin coalbed methane assets from Evergreen Resources Inc., Denver, for $22 million.
After closing, set for late September, it plans aggressive development focusing on three plays deemed of most potential for early gas production. This will involve completion of 37 wells standing cased and, in 2005, drilling of 60 more wells and start of gas sales. Heartland will open offices in Denver and Topeka, Kan.
Evergreen's assets consist of interests in 766,000 acres, 60 wellbores, surface equipment, gathering and surface facilities, geological, engineering, land, and accounting data and records.
The assets complement and are contiguous with Heartland's 252,000-acre leasehold in what Heartland described as the "thickest of the coal fairway" in the basin.
Upon closing, Heartland will hold 88 wells, including 43 CBM wells in eight pilots dewatering and/or venting gas, 37 wells awaiting stimulation, and 8 salt water disposal wells. Most of the leasehold is fee acreage, and thus far, water is easily disposed by injection into zones deeper than the coals.
Most of Evergreen is being acquired by Pioneer Natural Resources Co., Dallas (OGJ Online, May 06, 2004).
