Louis Dreyfus Natural Gas Corp., Oklahoma City, said it has completed the purchase of $133 million in oil and natural gas assets from Costilla Energy Inc., Midland, Tex. Louis Dreyfus Natural Gas says it anticipates a final cash price of approximately $126 million, after purchase price adjustments.
The purchase will initially be funded with borrowing from the company's existing credit facility.
The Costilla properties, primarily in South and West Texas, are in regions where Louis Dreyfus Natural Gas says it has considerable operating experience. For the first quarter of 2000, the properties averaged production of about 44 MMcfd of gas equivalent and added proved reserves of about 135 bcf equivalent at a cost of $0.93/Mcf equivalent. The reserves are composed of 87% gas and 13% oil.
Three million shares of a planned 5 million share offering will be sold by Louis Dreyfus Natural Gas, with the balance being offered by the company's largest shareholder, SA Louis Dreyfus et Cie.
Lehman Brothers Holdings Inc., Salomon Smith Barney Holdings Inc., Banc of America Securities Inc., Dain Rauscher Wessels Inc., and the Prudential Insurance Co. of America subsidiary Prudential Securities will underwrite the offering, expected to be completed by June 30.