Westport Acquires Acreage in Southeast Texas
Westport Resources has closed the acquisition of southeast Texas oil and gas properties from Smith Production Inc., located in Houston, Texas. The transaction is valued at approximately $120 million, subject to certain purchase price adjustments. Westport estimates the total proved reserves in the acquired properties to be approximately 76 Bcfe, of which 82% is natural gas. The Company will operate essentially all of the properties. The purchase also includes 10,000 net undeveloped acres and an interest in 300 square miles of 3-D seismic data. The properties are located primarily in Liberty, Hardin and Jasper counties in the Gulf Coast region of southeast Texas. Westport used funds drawn under its revolving credit facility to pay for the purchase.
During the month of August the acquired properties produced approximately 29 Mmcfe/d, net to the acquired interests, compared to Westport's average daily production through the second quarter of 2002 of approximately 354 Mmcfe/d. The properties have low average lifting costs (excluding transportation and production taxes) of approximately $0.16 per Mcfe.
"We believe this transaction allows Westport to assume an operating position in a prolific area yielding significant exploration and exploitation success. We expect ongoing 3-D seismic processing and interpretation to identify additional opportunities to increase production and reserves. Currently, we have one rig drilling in the area and expect to drill up to ten exploratory prospects over the next 12 to 24 months," stated Donald Wolf, Chairman of the Board and Chief Executive Officer of Westport.