El Paso Corporation, through its wholly owned subsidiary El Paso Production Holding Company, has closed its acquisition of Denver-based private, oil and gas company Medicine Bow Energy Corporation for $834 million in cash.
The purchase price has been upwardly adjusted from earlier agreements mainly as a result of Medicine Bow’s acquisition of incremental ownership interest in Four Star Oil & Gas prior to closing. As a result of the development El Paso’s ownership of Four Star at closing was 43.1%, up from 38.6% 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. Just over half of the acquired proved reserves in the deal are in the Rocky Mountains, expanding El Paso’s presence in a region that it considers to be strategically important.
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.