By OGJ editors
HOUSTON, Feb. 8 -- Peninsula Merchant Syndications Corp., a private merchant bank controlled by a former Salman Partners founder Sam Magid, has signed an agreement to pay Bankers Petroleum Ltd. $19.5 million for a 27% interest in the operator's 375,000 net acres in the Palo Duro basin in Texas.
The transaction, expected to close by Mar. 31, stipulates that a minimum of $15 million of the sale price be paid in cash.
The cash proceeds will be used to fund Bankers' 2007 US exploration budget in the Palo Duro basin and also its development program in Oklahoma, where the company expects to have its first gas production tied-in by summer.
Bankers will remain operator of its exploration activities in Palo Duro, where it is expecting to begin drilling its Cogdell 1-64 well soon. This well offsets the legacy Cogdell 1-1 well that had produced at a reported 2.8 MMcfd of gas over a 3-day test before experiencing mechanical problems and being shut in. Bankers is focusing on the Bend Group interval, using underbalanced air drilling techniques to minimize reservoir damage.
Bankers plans to drill two additional wells in the basin over the next 4 months, and is in the planning and permitting stage for a 3D seismic program over a portion of its acreage.