By OGJ editors
HOUSTON, Dec. 29 -- Chesapeake Energy Corp., Oklahoma City, agreed to acquire privately held BRG Petroleum Corp., Tulsa, and related partnerships for $325 million. The BRG acquisition is expected to close on Feb. 1.
The transaction includes production of 30 MMcfed from 477 existing wells, 223 bcfe of proved reserves, and 277 bcfe of probable and possible reserves, Chesapeake said. The BRG proved reserves have a reserves-to-production index of 20.3 years, are 93% gas, and are 48% proved developed.
BRG's properties are concentrated in the Midcontinent and in Arkansas, Louisiana, and Texas. Chesapeake has identified 213 proved but undeveloped sites and 420 probable and possible locations on BRG's leasehold.
The drilling locations are in the Sahara gas resource play in northwestern Oklahoma and in the East Texas Cotton Valley gas resource play in Nacogdoches County, Tex.
Chesapeake expects that, through the use of two rigs in 2005 and four rigs in 2006, it can increase gas production on the acquired properties to 70 MMcfed in December 2006 from 30 MMcfed in February 2005.