Drilling activity is brisk in the East Texas Deep Bossier gas play north of Bryan, Tex., and is poised to get even busier in 2006.
Burlington Resources Inc., Houston, producing a net 115 MMcfed and running 4 drilling rigs in the play in early November, acquired the assets of an undisclosed private co-owner partner in and around Savell field in Robertson County.
Burlington said it recently drilled three new field discovery wells in nearby areas but gave no details.
Meanwhile, Chesapeake Energy Corp., Oklahoma City, acquired 19.9% of another Deep Bossier participant, Gastar Exploration Ltd., Houston (OGJ Online, June 30, 2005). The purchase includes a 33% interest in Gastar’s Hilltop prospect in the play. Chesapeake and Gastar also formed a 13-county area of mutual interest in East Texas.
Burlington’s position
The development pace in Savell field and areas where it has acquired its partner’s interest can be expected to pick up in 2006, Burlington said.
The 26,870 net acres being acquired are producing 47 MMcfed.
The acquisition would boost Burlington’s Bossier holdings to 200,000 net acres. It will add exploratory rights in the area and related proprietary 3D seismic data and small nonoperated interests in nearby Bald Prairie and Garby fields in the Bossier Trend.
The deal hikes to 100% Burlington’s working interests in 16 Savell field producing wells and numerous potential offset locations.
Burlington is to pay $400 million for the assets, subject to fourth quarter 2005 adjustments, with closing set for Jan. 4, 2006.
Overall, Burlington has closed or committed to eight 2005 acquisitions totaling $755 million in the Bossier, Barnett shale, and Cotton Valley trends in Texas, the San Juan basin in New Mexico, and the Ring Border area of Canada.
Chesapeake-Gastar
Chesapeake acquired $76 million in new Gastar common stock, and consideration for the East Texas properties and acreage in Leon and Robertson counties is $7.7 million more.
The acquisition excludes 160-acre units adjacent to each of Gastar’s existing wells.
Chesapeake will pay 44.44% of drilling costs to casing point on the first 6 wells the parties drill to 19,000 ft or deep enough to test the Deep Bossier to earn a 33.33% working interest. Gastar will operate wells drilled on the Hilltop prospect.
Chesapeake will have first right to purchase on predetermined terms as much as 50% of any leasehold/working interest rights that Gastar acquires in the AMI.
Gastar said Navasota Resources LP has sued Gastar to claim a preferential right to buy 33.33% of Gastar’s interest in certain Leon and Robertson county leases, but Gastar contents that Navasota Resources “neither properly nor timely exercised any preferential right election it may have had.” ✦