Calpine selling Rocky Mountain gas reserves for $223 million

Calpine Corp., San Jose, Calif., agreed to sell its Rocky Mountain natural gas reserves in the Colorado Piceance basin and New Mexico San Juan basin for $223 million total to two US companies.

Aug. 24, 2004

By OGJ editors
HOUSTON, Aug. 24 -- Calpine Corp., San Jose, Calif., agreed to sell its Rocky Mountain natural gas reserves in the Colorado Piceance basin and New Mexico San Juan basin for $223 million total to two US companies.

The buyers were not identified. One deal is from $140 million and the other is for $83 million. Closing, subject to regulatory approvals, are expected in early September. The Rocky Mountain assets being sold represent 120 bcfe of proved gas reserves, producing 16.3 MMcfed net.

The announcement came only days after Calpine announced the sale of its Canadian gas reserves. PrimeWest Energy Trust agreed to buy all the oil and natural gas assets owned by Calpine Energy Holding Ltd. and Calpine Canada Natural Gas Partnership from Calpine Corp. for $806 million (OGJ Online, Aug. 18, 2004). All the firms are based in Calgary.

Net proceeds from the Canadian and Rocky Mountain sales will be used to reduce the amount outstanding under Calpine's existing $500 million first lien indebtedness.