In the transactions, the Company has acquired an approximate 60% working interest in the acreage and is designated the operator of the joint venture. The interests were acquired from multiple parties as follows: a) a 40% working interest was acquired in exchange for a payment of $350 per net acre and an agreement to carry the third party for a 20% working interest in a total of five wells and b) a 20% working interest was acquired from another third party in a like kind property exchange, whereby the Company will swap its approximate 30% working interest in a non-core waterflood oil reservoir in the Mary Blevins field of Smith County, Texas for the Angelina River play interest.
The Company plans to commence drilling operations on the acquired properties during the first quarter of 2007. As is the case across the Company's entire Angelina River play, the Travis Peak formation is the primary objective with secondary objectives being the James Lime, Pettit and Cotton Valley Sand formations, as well as potential in the Deep Bossier.
The transactions increase the Company's total gross acreage position in the overall Cotton Valley trend to approximately 177,230 gross acres and 111,650 net acres.
Walter G. "Gil" Goodrich, the Company's CEO commented, "We are pleased to announce the further expansion of our acreage position in the Angelina River play, where we have experienced success drilling for and making multi-stage completions in the Travis Peak formation. The acquired acreage, which consists of both the Bethune and Allentown Prospects, is situated just east of and on trend with our Cotton South prospect, where we are currently drilling on our eleventh well and where our average initial production rate has been approximately 2,600 Mcf per day.
"Our plan is to immediately move forward with the drilling of the initial well on the newly acquired acreage, as we view this acreage as having similar production and reserve potential as what we have experienced thus far in our Cotton South joint venture. While we will need to drill a number of delineation wells on the acreage prior to assessing its full impact on our existing inventory, we believe the acquired acreage may hold in excess of 200 potential drilling locations based on eighty-acre spacing for the Travis Peak. Our current plans are to keep at least two rigs working in the Angelina River play during 2007."
Goodrich Petroleum is an independent oil and gas exploration and production company listed on the New York Stock Exchange. The majority of its properties are in Louisiana and Texas.
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