Berry to purchase Wolfberry oil assets

Berry Petroleum Co. has entered into agreements with a group of sellers to acquire their interests in properties on about 9,300 net acres in the Wolfberry trend in West Texas for a combined cash purchase price of $180 million.

Oct. 26, 2010

By OGJ editors
HOUSTON, Oct. 26 -- Berry Petroleum Co. has entered into agreements with a group of sellers to acquire their interests in properties on about 9,300 net acres in the Wolfberry trend in West Texas for a combined cash purchase price of $180 million.

Berry's proved plus probable reserve estimates associated with the 40-acre development of the properties are about 35 MMboe with oil comprising 76%. Upon completion of the acquisitions, the properties are expected to add about 2,200 boe/d to Berry's production during 2011.

Since entering the Permian basin in March, Berry has accumulated about 19,350 net acres in the Wolfberry trend. The $313 million of acquisitions in 2010 is expected to provide a 5-year drilling inventory in the Wolfberry of 400 locations on 40-acre spacing with an additional 400 potential locations on 20-acre spacing.

The effective date of the transaction is Oct. 1 with closing expected in December and is subject to customary closing conditions. Production from the properties to be acquired is expected to be about 1,200 boe/d at closing. Contribution to the company's fourth-quarter production will be minimal given the expected closing date.