By OGJ editors
HOUSTON, Sept. 19 -- Merit Energy Co., private Dallas independent, plans to acquire Shell Exploration & Production Co.'s Michigan assets for $445 million. Closing is expected by early December.
Shell said the sale is part of the previously announced target of $2 billion in annual average divestments from the businesses in the Royal Dutch/Shell Group.
A competitive bidding process concluded earlier this month. Shell gave no reserves or production figures for the properties in the sale announcement, but company background information shows Shell operates 450 oil and gas wells along the Niagaran Reef Trend that produce 5,500 b/d of oil and 78 MMcfd of gas. Shell accounts for 20% of Michigan's oil and gas production.
Shell also operates the 350 MMcfd Kalkaska gas processing plant, the 35 MMcfd Manistee 23 sulfur treating plant, and four production units in Kalkaska, Manistee, Mayfield, and Gaylord. Throughput at the Kalkaska gas plant was 110 MMcfd.
Merit Energy owned reserves of 208 million bbl of oil and 555 bcf of gas in 14 states as of Dec. 31, 2002. It added 17.1 million boe of reserves during 2002.
The company produced a net 63,000 boed during 2002 and operated 5,660 of the 8,049 wells in which it held interests. Capital spending was $40 million in 2002.
Merit Energy's net income was $139 million on $436 million in revenues in 2002. The company had $1.3 billion in assets and employed 347 people.
The company's largest previous acquisition was a $395 million deal for Midcontinent and Permian Basin properties in 2002.
