The transaction, which is expected to be completed in mid-February 2014, is subject to customary closing conditions, while the company will pay around $30m in cash, subject to customary adjustments.
As part of the deal, the company will acquire acreage in the Niobrara shale formation, which includes around 28,241 net acres in Weld county and about 486 net acres in Morgan county of Colorado.
Of the 40 wells, Pacific Energy being acquired includes 11 operating wells and 14 non-operating wells, while the company will have an after-payout interest in 15.
As of September 2013, estimated average production of the 11 operated and 14 non-operated wells was around 400 net barrels of oil equivalent per day.
Pacific Energy Development president and CEO Frank Ingriselli said the acquisition will transform the company into one of the major players in the prolific Niobrara play.
"It offers us a unique opportunity to significantly increase our daily production in the DJ Basin and increase our acreage by over tenfold and also provides us entry into the exciting Wattenberg Area," Ingriselli added.
