By OGJ editors
HOUSTON, Mar. 21 -- Energen Resources Corp., a unit of Energen Corp., Birmingham, Ala., said it would acquire from First Permian LLC, a partially owned unit of Midland, Tex.-based Parallel Petroleum Corp., properties in the Permian basin in West Texas containing 43 MMboe of reserves for $120 million in cash and $70 million in Energen common stock.
Energen said it expects to spend an additional $100 million to develop the properties, bringing its all-in reserve cost to $6.70/boe or $1.12/Mcfe. More than 95% of the reserves being acquired are oil.
"We look for long-lived reserves; these reserves have a 27-year life," said Mike Warren, chairman and CEO of Energen. "We want to operate the properties we acquire; more than 90% of the value of these reserves is operated."
Warren added, "While Energen Resources's preference has been and continues to be natural gas, we have consistently stated that we would not shy away from predominantly oil properties that otherwise meet our acquisition criteria."