St. Mary to Split Up Greater Gulf Coast Region
St. Mary Land & Exploration Co. on Thursday announced the realignment of its Greater Gulf Coast region and the appointment of Lehman E. (Newt) Newton III as Vice President - Regional Manager of the Permian region. In addition, it has closed on a $29.5 million acquisition in South Texas.
REGIONAL RESTRUCTURING AND EXECUTIVE APPOINTMENT
St. Mary's Greater Gulf Coast region, which had previously overseen the Company's Gulf Coast and Permian operations, will be split into two separately managed regions. The Company's Permian Basin assets will be managed out of the Midland, Texas, office, which was opened in February of this year following the acquisition of the Sweetie Peck assets last December. The remaining onshore Texas, Gulf Coast, and Gulf of Mexico assets will be managed by the Houston office.
Newt Newton has been appointed Vice President - Regional Manager of the Permian region. Jerry Schuyler, Senior Vice President - Regional Manager of the Greater Gulf Coast region, left the company earlier this month to pursue other professional interests. The Company has begun the process of searching for a new regional manager for the Gulf Coast region.
Newton most recently served as General Manager of the Company's Midland office, which he helped open in February 2007. He began his career in 1979 with ARCO, and held positions of increasing responsibility in engineering, operations, and business development through 2000. Mr. Newton then founded and subsequently sold a private exploration and development company focused on the Permian Basin. He also worked for PURE Resources, a subsidiary of Unocal, as well as its successor owner Chevron. He has a degree in chemical engineering from Texas Tech University and is a registered professional engineer.
SOUTH TEXAS ACQUISITION
St. Mary also closed on a South Texas acquisition on June 1, 2007. The acquired assets target the Olmos shallow gas formation and are located in the Catarina Field in Webb and Dimmit Counties, Texas.
Highlights of the transaction include the following:
- Purchase price of $29.5 million to be funded with cash on hand and bank borrowings under the Company's existing credit facility.
- 100 percent operated, with an average working interest of 30.0 percent and net revenue interest of 22.5 percent.
- Estimated net unrisked proved reserves of 14.0 BCFE (99 percent natural gas), 65 percent of which are proved developed.
- Current net production of 2.9 MMcfe/d (98 percent natural gas). The acquisition is expected to contribute approximately 600 MMcfe of production in 2007.
At this time, the Company is not changing the previously issued production guidance for the second quarter or full year of 2007 contained in the press release issued by the Company dated May 3, 2007.
Tony Best, President and CEO, commented: "With operated activity ramping up in the Permian Basin and the addition of these South Texas assets in the Gulf Coast region, we felt this was the right time to split the region into two separate operating areas. Newt brings an incredible amount of Permian Basin knowledge and experience to St. Mary and we are excited to have him manage the assets in this new region. With respect to the announced acquisition, onshore South Texas is an area that we have been looking to enter for a number of years. We are entering the play at an attractive cost and believe that this acquisition gives us a foundation for growth in the region."
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