Patina Oil Acquires Cordillera Energy

Patina Oil & Gas Corporation has agreed to acquire all of the assets of Cordillera Energy Partners, L.L.C. Cordillera is a privately held oil and gas company based in Denver, whose principal shareholder is EnCap Investments, L.P. The purchase will increase Patina's proved reserves by 235 Bcfe or roughly 20%. Cordillera will receive $240.5 million of cash plus five year warrants to purchase 500,000 shares of Patina common stock at a price of $45.00 a share. The reserves being acquired are 93% natural gas and located primarily in the Anadarko and San Juan Basins. Net daily production from the properties currently exceeds 30 MMcfe, comprised of 27 MMcf of gas and 600 barrels of oil. The acquisition will be immediately accretive to earnings and cash flow. The purchase, subject to normal closing conditions, is scheduled to close on October 1st and is expected to be funded with borrowings under Patina's bank facility.

The properties being purchased include interests in 600 currently producing wells in the Anadarko Basin of western Oklahoma and the Texas Panhandle, the San Juan Basin within Rio Arriba and San Juan Counties of New Mexico and, to a lesser extent, the Permian Basin. Over 85% of the reserve value is operated. The properties are believed to have significant development potential and generally produce from tight sand formations, providing opportunities for Patina to apply its expertise in fracture stimulation. Commenting, Thomas J. Edelman, the Company's Chairman, remarked, "The Cordillera acquisition represents the largest purchase in our history and has substantial strategic value. It not only adds materially to our operating base in the Mid-Continent, it establishes a third core area in the San Juan Basin. The purchase will immediately add almost a quarter of a Tcfe to our proved reserves, increase production by more than 30 MMcfe a day and contribute significant growth potential. Finally, the acquisition will be immediately accretive to cash flow and earnings. In combination with the substantial inventory of high return development opportunities we hold in Wattenberg and the Mid-Continent, the acquisition positions Patina to continue to deliver significant production growth and superior performance for the foreseeable future."

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