El Paso Corporation announced that its wholly owned subsidiary, El Paso Exploration & Production Company, has entered into three purchase and sale agreements for the sale of non-core properties in its Onshore and Texas Gulf Coast regions.
The aggregate sales price for the properties is $517 million, subject to customary adjustments. As of December 31, 2007, the company had an estimated 191 billion cubic feet equivalent (Bcfe) of proved reserves associated with the properties, with roughly half coming from each region. The December 2007 average production for Texas Gulf Coast properties was 39 MMcfe/D, while the Onshore properties produced 17 MMcfe/D.
"We are pleased to complete another important step in the high grading of our portfolio," said Brent Smolik, president of El Paso Exploration & Production Company. "We expect these sales, together with our 2007 acquisitions, to meaningfully improve the efficiency of our operations, the depth of our inventory, and our future growth potential. They will create greater geographic focus within our Onshore and Texas Gulf Coast operating regions and remove a number of relatively high-cost properties."
Closing of each of the transactions is subject to customary conditions and is expected to occur during the first quarter 2008. Proceeds will be used to repay debt incurred with the acquisition of Peoples Energy Production Company in September 2007. El Paso is also negotiating with prospective bidders for the sale of selected non-core Gulf of Mexico properties.
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