The acquisition was from Castex Energy Inc., and a number of its affiliates (Castex) for approximately $162 million. Castex, a privately held Houston-based oil and gas producer, will retain an interest in the properties and will continue to operate them.
"This initial transaction is important as it demonstrates our ability to partner with a strategic company like Castex and provide value for both parties," said Richard J. Pershing, chief executive officer of Mirant's Americas business group. "This is part of our overall strategy to increase equity positions in producing properties." The acquisition, which has reached financial closing, is expected to contribute about 4 cents a share to earnings in 2002, further supporting earnings forecasts already made by the company.
Mirant -- through its indirect wholly owned subsidiary Mirant Americas Production Co. -- now owns an estimated 96 billion cubic feet of proven oil and gas reserves, 82 percent of which are natural gas. A substantial portion of the 38 million cubic feet equivalent per day in current production is contracted to be sold at an average fixed price of $4 per million British thermal units through 2002.
The acquisition also will produce added mineral royalty and bonus revenues from an interest in more than 206,000 acres of fee lands, where the rights are to the surface and minerals. Additionally, Mirant and Castex have identified more than 200 low-risk opportunities where new wells can be drilled or where production at existing wells can be extended, allowing the companies to develop additional reserves.
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