Burlington Resources Inc., Houston, (NYSE: BR) plans to acquire substantially all the assets of a privately held company that is a co-owner with Burlington in the Savell Field, East Texas for $400 million. The transaction is expected to close in the beginning of January. The acquisition will increase Burlington's production in the field and raise its Bossier trend leaseholdings to approximately 200,000 net acres. Burlington will also gain additional exploratory rights in the area and related 3-D seismic data, as well as small nonoperated interests in the nearby Bald Prairie and Garby fields. The acquisition includes some 26,870 net acres with current production of some 47 million cubic feet of gas equivalent per day. Burlington's interests in 16 producing wells in the Savell Field will increase to 100% as a result of this transaction. "We are very pleased to have this opportunity to expand our holdings in such a promising new drilling trend," says Bobby Shackouls, Burlington's chairman, president and chief executive. "We expect this acquisition to increase our production and offer very favorable economics, particularly since it does not require additional equipment or personnel. It will provide us with greater flexibility to make key field development decisions in the future." Standard & Poor's reports this acquisition will not immediately affect Burlington's rating of BBB+/Stable/A-2. The transaction will be financed with cash on hand and is consistent with S&P's expectations and Burlington's growth strategy, the ratings firm says.
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