As of the effective date, the Company is selling approximately 41 net Bcfe of proved reserves (44% proved developed producing) based on an internal mid year reserve report. The properties produced at an average rate of approximately 13,000 Mcfe per day net to the Company for the month of December. Using these factors, the Company achieved a sales price of approximately $2.44 per Mcfe of proved reserves or approximately $7,700 per flowing Mcfe.
Commenting on the sale, Gil Goodrich, Vice Chairman and CEO said, "We are very pleased to announce this transaction, which will allow us to complete our strategic shift into the Cotton Valley trend, which has been our primary focus for the last three years and provides the Company with significant growth potential. When combined with our capital raising activities in the fourth quarter of 2006, we are now extremely well positioned to fund our 2007 capital expenditure budget of $275 million, as well as maintain a conservative debt to capitalization ratio."
Goldman Sachs acted as advisor to the Company on the transaction.
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