El Paso Closes Acquisition of Medicine Bow Energy
El Paso Corporation has closed its previously announced acquisition of Denver-based Medicine Bow Energy Corporation for $834 million in cash through its wholly owned subsidiary, El Paso Production Holding Company (EPPH).
The adjusted purchase price of $834 million is primarily attributable to Medicine Bow's acquisition of incremental ownership interest in Four Star Oil & Gas prior to closing. El Paso's ownership of Four Star at closing is 43.1 percent, up from 38.6 percent when the transaction was originally announced. Estimated proved reserves associated with the Medicine Bow acquisition are 383 billion cubic feet equivalent, and estimated average daily production is 103 million cubic feet equivalent per day. As indicated previously, Four Star's reserves and volumes will not be consolidated into El Paso Corporation's or El Paso Production Holding Company's financial reports but will be reported as an equity interest.
Increased Presence in Denver
Slightly more than half of the acquired proved reserves are in the Rocky Mountains, expanding El Paso's presence in this important region. "We are excited to increase our presence in the Rockies, and we expect to retain the majority of Medicine Bow's talented staff as well as its existing office in downtown Denver," said Lisa Stewart, president of El Paso's Production and Non-regulated Operations. "In addition, we plan to move the management of El Paso's existing Rockies assets to Denver from Houston and will add additional personnel to the Denver office to focus on expanding our Rockies presence."