"Today's announcement marks the continued successful execution of the strategic restructuring of our organization," stated William G. Hargett, chairman, president and chief executive officer. "Transforming a company's asset base and growth strategy is a challenging task, so we have been patient and thorough during our sales process in order to capture the value of these assets. Our resources are now focused onshore, where we believe our core competencies will deliver more stable and predictable production and reserve growth through an active program that includes both drilling and acquisitions."
Prior to closing the sale of the Louisiana assets, the company plans to unwind hedged production volumes of approximately 80,000 MMBtu per day for the period from June 2006 through December 2006. Thereafter, the company's remaining 2006 hedged production volumes are expected to total approximately 170,000 MMBtu per day.
Uses of the proceeds from the sale of the Louisiana assets may include, but not be limited to, developing existing assets, acquiring additional properties in U.S. onshore basins, repaying outstanding bank debt, and repurchasing shares of the company's common stock. Any such share repurchases will be made pursuant to the company's existing $200 million share repurchase program, and, accordingly, will be subject to market conditions, applicable legal and contractual requirements, and other factors.
Wachovia Securities is serving as the financial adviser to the company in connection with the sale of the Gulf of Mexico assets.
Gulf of Mexico Divestiture Summary:
To date, the company has completed, or has pending, Gulf of Mexico sales transactions totaling approximately $810 million, prior to customary closing adjustments. At year-end 2005 the total estimated proved reserves associated with these offshore assets were 244.6 Bcfe. The execution of this divestiture program is highlighted by the following key milestones:
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