By OGJ editors
HOUSTON, Feb. 21 -- Exploration Co., San Antonio, agreed to acquire privately owned Output Exploration LLC for $95.6 million in cash and stock in a move to boost natural gas production and reserves.
Output Exploration's core property is Fort Trinidad field in the East Texas counties of Houston and Madison. In the Midcontinent, Output Exploration holds 11,000 net acres in 16 counties of western Oklahoma, centered on Rush Springs field in the Anadarko basin.
Exploration Co. will pay $91.6 million in cash and $4 million in stock. The acquisition involves 31,000 net lease acres, of which 24% is undeveloped.
Exploration Co.'s production will increase by 62% upon closing, expected by Apr. 2. On a pro forma basis, the expanded Exploration Co. will produce 2,477 b/d of oil and 7 MMcfd of gas.
The transaction will double Exploration Co.'s proved reserves, adding 40 bcf equivalent of gas. Exploration Co. estimates that Output, of Houston-area Stafford, Tex., also has 51 bcf in probable and possible reserves.
Output Exploration's East Texas prospects are believed to be geologically similar to Exploration Co.'s existing Maverick basin properties.
Separately, Exploration Co. has increased its Maverick basin lease holdings through an agreement with EnCana Oil & Gas (USA) Inc., bringing Exploration Co.'s holdings to nearly 560,000 net acres there.
Exploration Co. acquired an interest in primarily shallow horizons of the Glen Rose formation under 85,681 acres, plus a 50% interest in 16,810 acres of the block through the Sligo formation.
