Gasco Picks Up Additional Uinta Basin Assets
Gasco Energy, Inc. said that it has acquired certain gathering assets and producing properties associated with the Riverbend Project in Utah's Uinta Basin for a cash purchase price of $4,875,000 plus settlement for production from effective date. The gathering assets and properties are located entirely within Gasco's existing Riverbend leasehold allowing the Company to further capitalize on economies of scale and operating efficiencies. The transaction closed on August 14, 2006 with an effective date of July 1, 2006.
The company assigned a value of approximately $2,500,000 to the gathering assets, which includes 21 miles of 4" to 8" mainline gathering pipelines. The acquired gathering assets should provide more timely and cost-effective tie-in of the existing Wilkin Ridge & West Desert systems to Gasco's Riverbend gas processing facility. Gasco now controls over 80 miles of mainline gathering and a 50 MMcf/d gas processing facility in the Riverbend Project.
Gasco previously announced an $80 million 2006 capital budget that included $5.0 million to connect its Wilkin Ridge and West Desert gathering systems to its Riverbend gas processing plant. The gathering lines acquired in this transaction may be tied into these systems at an estimated cost of $1.5 million, allowing the company to potentially realize a savings of $1.0 million versus amounts previously budgeted.
Also included in the acquisition are 24 oil and gas wells producing 850 thousand cubic feet equivalent per day (Mcfe/d) gross (680 Mcfe/d net). In the transaction, Gasco acquired approximately 1.6 billion cubic feet equivalent of proved reserves. The acquisition has no effect on gross acreage leasehold positions and a negligible effect on net acreage leasehold totals.
A number of the wells are producing oil and associated gas from the shallow Green River Formation. Some of the existing well pads will lend themselves to also be used as locations for deeper Spring Canyon (Blackhawk) wells which should yield savings on building a new drilling pad and access road of $50,000 to $100,000 per location.
Commenting on the acquisition, Gasco's CEO and President, Mark Erickson said: "Today's acquisition allows Gasco to add to assets in its core Riverbend operating area in a facile transaction that consists of buying out an industry partner's overlapping gathering and production assets. The gathering assets help to continue establishing critical mass in the Uinta Basin, while the existing well locations provide another opportunity to reduce total well costs. This acquisition furthers our commitment to best exploiting what we believe is a large resource base in the gas-rich Uinta Basin."
Gasco Energy, Inc. is a Denver-based natural gas and oil exploitation and development company that focuses on natural-gas-rich prospects in the Rocky Mountain area of the United States. The Company currently is active in the Uinta Basin in Utah and controls acreage in the Greater Green River Basin of Wyoming.
- BLM Greenlights Gasco's Uinta Basin Drilling Plans (Jun 18)
- Gasco to Start Drilling Uinta Wells in October (Sep 01)
- Gasco Briefs Operations for 2Q11 (Jul 13)