The properties to be sold are primarily located in the Permian Basin in West Texas and southeastern New Mexico; the mid-continent area, which includes the Anadarko Basin in Oklahoma, Texas and Kansas; and the East Texas Basin.
The sale properties do not include the company’s Haynesville Shale, Paradox Basin, Cleveland Sand Play and Tuscaloosa Marine Shale properties. The sale is expected to close in May 2010 and is subject to completion of customary due diligence and closing conditions.
Production attributable to the properties being sold is estimated at approximately 13,000 barrels of oil equivalent per day (approximately 2/3 natural gas) and the December 31, 2009 proved reserves on these properties based on SEC prices as of that date were estimated to be approximately 54 million barrels of oil equivalent (approximately 64% natural gas).
The proceeds from the sale will primarily be used to pay down the company’s $1.6bn bank credit facility, which had $800m outstanding at March 31, 2010. The bank credit facility may be re-determined by its lenders as a result of the sale and could be reduced.
