Phillips Petroleum acquires coalbed methane assets

Phillips Petroleum Co., Bartlesville, Okla., acquired additional coalbed methane assets in Utah, Alabama, and Wyoming through four transactions totaling $123 million cash.


Phillips Petroleum Co., Bartlesville, Okla., acquired additional coalbed methane assets in Utah, Alabama, and Wyoming through four transactions totaling $123 million cash.

Phillips said all the acquisitions were included in the revised capital budget announced earlier this year.

The company acquired River Gas Corp., a privately held US coalbed methane producer headquartered in Tuscaloosa, Ala., as well as the coalbed methane positions of three other companies in the Powder River Basin of Wyoming. The transactions will add 215 bcf of net reserves, said Phillips, at a cost of about 57�/Mcf.

The acquisition of River Gas Corp. includes ownership in 166,000 gross acres in the Drunkards Wash field in Utah and the Whitson field in the Black Warrior Basin of Alabama. Phillips will become operator of and own a 25% interest in each field.

The Powder River basin acquisitions will increase Phillips' gross acreage position by 90,000 acres, with Phillips as operator with more than 90% working interest. This will bring Phillips' total position in the basin to 430,000 gross acres, said the company. More than 500 wells are likely to be drilled in 2001.

"These acquisitions support our strategy to become the leading coalbed methane producer in the United States," said Jim Bowles, vice president of the Americas division, exploration and production. "These properties, combined with the talented employees from the River Gas acquisition, will complement our existing coalbed methane position and provide Phillips with a platform for continued US gas growth."

A statement said, "Combined with the company's existing coalbed methane production in the San Juan, NM, and Powder River basins, the acquired assets bring Phillips' total net US coalbed methane production to 235 MMcfd. The company expects its US coalbed methane production to increase by approximately 50% in the next 3 years."

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