The effective date of the transaction is January 1, 2008, and closing is expected by January 31, 2008.
The company estimates the purchase to include approximately 83 billion cubic feet of natural gas equivalent of proved reserves, of which 35% is proved developed and 90% is operated. Current estimated net production is approximately 10 million cubic feet of natural gas equivalent per day. Approximately 3,000 net acres are included in the transaction.
Floyd Wilson, chairman, president and CEO, said: Today’s addition opens up underdeveloped territory to our experienced drilling and operating team in Elm Grove Field. Elm Grove is our most efficient field in terms of investment payouts, ultimate recoveries, operating costs and price realizations.
This new acreage has not been developed in the Hosston formation, has had only limited development in the Lower Cotton Valley, and will be highly complementary to our 20-acre drilling program in the field.
