The Company sold its interest in the Jo Mill Unit in Borden County, Texas effective August 1, 2004 for cash proceeds of $22.1 million, subject to normal post-closing adjustments. This property was acquired by the Company in May 2004 in connection with the Southwest Royalties merger. The Company expects to report a pre-tax gain on this sale of approximately $3 million during the fourth quarter of 2004.
The Company also sold substantially all of its interests in the Romere Pass Unit in Plaquemines Parish, Louisiana effective December 10, 2004 for cash proceeds of $8.2 million, subject to normal post-closing adjustments. The Company retained drilling rights to five locations in the unit, of which two are proved undeveloped locations and three are exploratory locations. Since the purchaser assumed all of the Company's asset retirement obligations applicable to the unit, the Company was able to cancel a $3.5 million letter of credit issued to a previous owner. This unit was shut-in from mid-September through early November while repairs were being made to facilities damaged by Hurricane Ivan. The Company expects to report a pre-tax loss on this sale of approximately $13 million during the fourth quarter of 2004.
Combined proceeds from these sales of $30.3 million were used to repay bank debt. Together, these properties contributed approximately 725 barrels of oil per day and 840 Mcf of gas per day to the Company's third quarter 2004 production.
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