|Thursday, November 04, 1999
The Houston Exploration Company has announced that it has acquired an offshore property in the Gulf of Mexico with 21 billion cubic feet equivalent of net proved reserves. The acquired field, West Cameron 587, will add 21 bcfe of net proved reserves to Houston Exploration's reserve base. Once the field is developed it is expected to provide an average of approximately 18 mmcfe per day in additional production for the year 2000. The acquisition, which closed this week, was from a private, undisclosed seller. "We're very pleased with this acquisition," said James G. Floyd, President and Chief Executive Officer of The Houston Exploration Company. "This acquisition fits perfectly with our operating strategy. It is in our core operating area of the shallow waters of the Gulf of Mexico and it provides upside drilling potential. Further, we have a majority working interest and we will serve as operator. The property is backed by additional probable reserves that are performance-driven. The West Cameron 587 field will further increase our potential cash flow generation." Earlier this year the seller drilled the first well in the West Cameron 587 field and encountered pay in three horizons. A delineation well was subsequently drilled and found the same three pay sections. The reserves associated with the lease were fully engineered by two separate independent engineering firms. The Houston Exploration Company acquired a 64 percent working interest in the field. The purchase price of $21 million is based on an effective date of Oct. 1, 1999. Houston Exploration funded the acquisition through its existing commercial banking credit facility.