Bill Barrett Signs PSA for Niobrara Oil
Bill Barrett has signed a purchase and sale agreement with an affiliate of Texas American Resources Company to acquire properties in the Denver-Julesburg (DJ) Basin targeting Niobrara oil that include a preliminary estimate of 7 million barrels of oil equivalent (MMBoe) net proved reserves, approximately 650 Boe per day net production and approximately 28,000 net acres of mineral leasehold, primarily on fee lands. Current production is predominantly from the Codell and Niobrara formations. The purchase price is $150 million.
The DJ Basin is an area where the Bill Barrett team has established expertise, with several team members having more than 30 years experience in the area. The acquired properties are located within and near the prolific Wattenberg Field and near the Hereford area, close to the Colorado-Wyoming border, where a number of successful Niobrara wells have been drilled.
Chairman, Chief Executive Officer and President Fred Barrett commented, "We are pleased to build our position in this prolific area, right in our backyard. For the past two years we have been assembling a DJ Niobrara oil position and this acquisition will give us more than 67,000 net acres. With this acquisition, we have established a new, sizable DJ play that includes exploitation opportunity within the existing Wattenberg development area and a sizable exploration acreage position, where we intend to test the Niobrara through horizontal drilling this year. Once again, we have identified an acquisition opportunity that complements an existing position and increases the oil component in our portfolio while offering current production, reserves and upside potential."
The agreement is subject to customary provisions. The Company expects to provide further details upon closing, which is expected to occur in the third quarter of 2011. The Company's preliminary estimate of 2011 capital expenditures associated with the acquisition is up to $35 million.
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