CCBM Inc. and Rocky Mountain Gas Inc. have given some of their jointly owned coalbed-methane properties to newly formed Pinnacle Gas Resources Inc. in exchange for stock in the company. CCBM is a subsidiary of Carrizo Oil & Gas Inc. Rocky Mountain Gas is a subsidiary of U.S. Energy Corp. and Crested Corp. Pinnacle is backed by Global Energy Partners and other affiliates of Credit Suisse First Boston Private Equity, which provided the start-up about $18 million in return for preferred stock, common stock and warrants, and agreed to provide up to an additional $12 million to fund future drilling, development and acquisitions. The properties contributed to Pinnacle-owned 50% by CCBM and 50% by Rocky Mountain Gas-include leases and production in the Clearmont, Kirby, Arvada and Bobcat project areas, valued at $15 million. In exchange, Rocky Mountain and CCBM each received 37.5% of the common stock of Pinnacle. On a fully diluted basis, assuming the additional $12 million of funding is provided by Credit Suisse, each company will own a 16.67% interest in Pinnacle with options to increase its fully diluted ownership to 22.73%. Immediately following its initial capitalization, Pinnacle entered into a joint venture with Gastar Exploration Ltd., buying into coalbed-methane properties with proceeds from the Credit Suisse financing. Pinnacle acquired an approximate 50% working interest in producing and nonproducing leases and about 38,000 gross acres prospective for coalbed-methane development. The majority of the leases are either part of or adjacent to the Bobcat property which was contributed to Pinnacle by Rocky Mountain Gas and CCBM. Gastar received about $6.2 million in cash, plus an agreement by Pinnacle to fund up to $14.5 million of future development-drilling costs on the Gastar acreage before year-end 2005. -Petroleum Finance Week