GE subsidiary and GeoResources to acquire Oklahoma oil and gas reserves

GE Energy Financial Services and GeoResources, a Houston-based exploration and production company, are investing up to $90.5 million to acquire and develop proven producing oil and gas reserves in Oklahoma, US.

GE Energy Financial Services and GeoResources have formed a new partnership, Okla Energy Partners, to acquire 82% of the assets from a group of private sellers. A wholly owned subsidiary of GeoResources will purchase the remaining 18%.

The two entities have entered into a purchase and sale agreement with the sellers to acquire the reserves for $60.5 million and expect to invest up to $30 million to develop additional proven reserves. The GE unit is investing 98% as a limited partner in Okla Energy Partners and GeoResources is investing 2% as a general partner and operator.

GeoResources’s ownership in Okla Energy Partners can reportedly increase based upon the partnership’s performance. The acquisition is expected to close later in June 2008.

The properties include more than 200 producing wells in multiple fields across Oklahoma and more than 90 drilling locations mostly classified as proved undeveloped. Current production is approximately 90% natural gas.

Frank Lodzinski, CEO of GeoResources, said: This transaction is consistent with GeoResources’s business strategy, which focuses on building reserves, production, cash flows and earnings and on expanding our acreage, development opportunities and exploration inventory. The Oklahoma properties bring long-lived gas reserves and a large drilling inventory to our portfolio, establishing a significant footprint in Oklahoma for future expansion.