The producing and undeveloped properties total approximately 24,800 gross acres located in four fields in Webb, Jim Hogg, Wharton and Calhoun counties in Texas. The wells are located in N.E. Thompsonville field, South Laredo field, McFarlan field and Maude Traylor field. The acquisition includes interests in 146 wells and continues to increase the Company's onshore reserve position with the addition of 42 Bcfe of proved reserves, representing an approximate 10 percent increase to the existing reserve position. The N.E. Thompsonville Field is the largest field, produces from the Wilcox, and represents 70% of the proved reserves and nearly 75% of the current production. Currently the properties are producing average net sales of 16 MMcfe/d.
Chairman of the Board, Robert B. Catell, stated, "The acquisition demonstrates our continued commitment to increase value for our shareholders. Our strategic objective is to continue utilizing our expertise in core areas to generate production growth that is accretive to earnings."
"Our expansion in South Texas is a direct result of our historical operating performance and the investment in 3-D technology that continues to improve drilling and development results," said William G. Hargett, President and Chief Executive Officer. Additionally, "These new properties will continue providing operating efficiencies to our South Texas operations as they are adjacent to existing operations in the Charco Field."
This new acquisition will increase the Company's current net South Texas production by 15% to an average of approximately 123 MMcfe/d. The Company expects a closing date of May 31, 2002 with an effective date of January 1, 2002.
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