GeoResources Inc., Houston, (Nasdaq: GEOI) has acquired additional working interests in Giddings Field in Texas from an undisclosed associated partner for $48.4 million.
GeoResources acquired undivided working interests in 68 producing wells, increasing working interests from 6.5% through 7.8% to approximately 34% to 37%. Estimated proved reserves of the acquired interests are 25 billion cu. feet equivalent (88% gas, 73% developed). Production is 10.6 million cu. ft. and 85 bbl. of liquids per day. GeoResources remains as operator and general partner.
The acquisition provides additional development opportunities and exposure to upside associated with the Eagle Ford shale and other prospective targets.
The acquisition was funded with borrowings from the company’s senior secured revolving credit facility. GeoResources hedged 1 billion cu. ft. for the remaining six months of 2009 and 1.4 billion cu. ft. for 2010 at $5.155 per Mcf.
In the Bakken, GeoResources and privately held joint-venture partner Slawson Exploration Co. acquired producing wells and acreage from Windsor Bakken LLC for $10.4 million. Northern Oil & Gas Inc., Wayzata, Minn., (Amex: NOG) and privately held Lario Oil & Gas Co. also participated in the deal. Northern announced last week it acquired assets from Windsor Bakken for $7.3 million in cash.
The assets acquired by GeoResources include a 15% interest in approximately 60,000 net acres, and also 15% of varying working interests in 59 producing and productive wells. Net proved producing reserves are 300,000 BOE. Net daily production is approximately 180 bbl. of oil per day.
Pro forma, GeoResources has working interests in the area from 10% to 15% in approximately 100,000 net acres. Of those total acres, approximately 59,000 net acres are in Mountrail County, with the remainder in adjacent North Dakota counties and in Richland County, Montana.
The joint venture is presently running one drilling rig and plans to add two rigs in July and possibly a fourth drilling rig by first-quarter 2010.
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