By OGJ editors
HOUSTON, Jan. 23 -- UK independent Sterling Energy PLC has agreed to acquire Whittier Energy Corp. of Houston for $145 million and the assumption of $43 million in debt. The acquisition is to be completed in late April, subject to Whittier shareholder approval.
The purchase will add "significant" onshore US production and development assets to Sterling's existing offshore Gulf of Mexico assets, said Sterling Chief Executive Officer Harry Wilson.
Following the acquisition, the enlarged group will have proved and probable (2P) reserves increasing to 24.8 million boe from 12.9 million boe, its production is estimated to increase to 6,500 boe/d from 3,400 boe/d of oil, and combined US net gas production will exceed 28 MMcfd of gas equivalent (4,700 boe/d). The group also will have an increased annualized cash flow from operations to $80 million from $35 million, allowing it to fund a greater level of exploration activity.
For the 9 months ended Sept. 30, 2006, Whittier reported profits before tax of $9.2 million and net assets of $74 million.
During its 2006 drilling campaign Whittier drilled 40 wells with a success rate of 85%. By yearend, production is estimated to have reached 19 MMcfd of gas equivalent. Over 40 low-risk wells are planned, complementing Sterling's 2007 exploration program, which together with Whittier is targeting 60 million boe of net unrisked reserves.