St. Mary has exchanged its non-operated position at the Judge Digby Field for an increased position in its operated Sweetie Peck assets in the Wolfberry tight oil program in West Texas and cash.
Tony Best, President and CEO, commented, "This exchange is another step in St. Mary's strategic shift toward becoming a resource-play oriented company. It allows us to increase our interest in a core growth area while furthering our goal to reduce our exposure to non-resource type assets. As higher production decline assets such as Judge Digby become a less significant part of our production base, our investments in resource play projects will provide a more stable and predictable production profile."
EXCHANGE FOR PERMIAN ASSETS
In late December 2008, St. Mary closed a transaction whereby it received an increased net revenue interest in its operated tight oil assets at Sweetie Peck in West Texas and approximately $18 million in exchange for the Company’s interests in the Judge Digby Field in Pointe Coupee Parish, Louisiana.
The Sweetie Peck tight oil program has a multi-year drilling inventory, with potential for increased density drilling, which St. Mary plans to exploit over the coming years.
The exchange was effective as of December 31, 2008. The 2009 production impact from this exchange is anticipated to be a net reduction of approximately 2.0 BCFE.
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