Upon completion of the transaction, Newfield will acquire proved reserves of 200 Bcfe and probable and possible reserves of more than 150 Bcfe. The proved reserves are 70% natural gas and are 52% developed. In addition to the existing proved, probable and possible reserves, significant upside exists through further field downspacing, secondary recovery, deep gas potential and the development of emerging resource plays. Current net daily production is approximately 40 MMcfe/d. These are long-lived assets and the proved reserves have a reserve life index of nearly 15 years. Subject to customary conditions, the transaction is expected to close in June 2007.
"We entered the Rockies in 2004 with our acquisition of the giant Monument Butte Field in the Uinta Basin," said David A. Trice, Newfield Chairman, President and CEO. "Since that time, we've grown production more than 40% and doubled our acreage position in the Uinta while looking for the 'right' transaction to significantly increase our footprint in the Rockies. Today's announcement does just that! We are acquiring quality reserves in fields with development drilling opportunities. But just as important, it provides a stepping stone to build a business in the region's major producing areas. We are confident that the Rockies will be an important part of future U.S. gas supply and we are better positioned to be a major producer in the region."
"We plan to finance this transaction initially with our credit agreement and ultimately through asset divestitures," Trice added. "We intend to market our assets in Bohai Bay, China, our properties in the U.K. North Sea and some smaller packages along the onshore Texas Gulf Coast and in the Mid-Continent, as well as some properties in the shallow water Gulf of Mexico. We are excited about the 'new' Newfield and our prospects to add future value for our shareholders."
In addition to the areas described above, this transaction also provides additional exploration opportunities in the following regions: the Wind River Basin of Wyoming; the Southern Alberta Basin in Glacier County, Montana, the Uinta Basin in Carbon County, Utah; and the Northern Denver-Julesburg (DJ) Basin in Platte County, Wyoming.
Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy of growing reserves through the drilling of a balanced risk/reward portfolio and select acquisitions. Newfield's domestic areas of operation today include the onshore Gulf Coast, the Anadarko and Arkoma Basins of the Mid-Continent, the Uinta Basin of the Rocky Mountains and the Gulf of Mexico. The Company has international operations in Malaysia, the U.K. North Sea and China.
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