Petrohawk Energy Corporation has signed a definitive agreement to acquire additional acreage in the heart of the Fayetteville Shale Trend, primarily in Van Buren, Conway and Cleburne counties, from a private seller for $222.5 million. Including this acquisition, Petrohawk's leasehold in the Fayetteville Shale has grown to approximately 150,000 net acres.
The assets include approximately 18,500 net acres along with a strategically located pipeline gathering system. The new properties add significant reserve potential and a substantial number of drilling locations to Petrohawk's current inventory in the play. Of the total net acreage acquired, the Company estimates that approximately 10% is classified as proved.
Production from the properties is approximately 5 million cubic feet of natural gas equivalent per day (Mmcfe/d). The initial gross production rate for the two operated wells drilled on the acreage during 2007 was approximately 5 Mmcfe/d and 4 Mmcfe/d, respectively. Petrohawk estimates proved reserves to be approximately 50 Bcfe.
The transaction, which is subject to customary closing conditions, is effective January 1, 2008 and is expected to close in February. Additionally, a portion of the asset purchase will qualify as a like-kind exchange for property sold in Petrohawk's recently announced Gulf Coast divestment, with expected deferred tax benefits to the Company.
Petrohawk Energy Corporation is an independent energy company engaged in the acquisition, production, exploration and development of natural gas and oil with properties concentrated in North Louisiana, Arkansas, East Texas, Oklahoma and the Permian basin.
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