"You haven't lived until you've known three-way," says Tim Petrus, XTO Energy Inc. senior vice president of acquisitions. The company did a three-way asset swap last spring with CMS Oil and Gas Corp. and Marathon Oil Corp. "You know how hard it is to get two people to do a trade," he told fellow acquisitions professionals at a recent Society of Petroleum Engineers event in Houston. "When you get three people [involved], take that to the power of 10." He had never seen some XTO Energy personnel "so stressed," he added. XTO bought 100 billion cubic feet (Bcf) of proven coalbed-methane (CBM) gas reserves in the Powder River Basin of Wyoming and Montana from CMS for $101 million and then traded those to Marathon for assets in East Texas and Louisiana. Separately, but as part of the deal, it purchased assets from Marathon in the San Juan Basin in New Mexico. The two deals with Marathon had a total value of $164 million and resulted in additional proved reserves of 145 billion cubic feet equivalent (Bcfe). Property swaps are favored when possible because of their reduced tax consequences. Houston-based acquisition and divestiture advisory firm Randall & Dewey Inc. orchestrated the three-way deal. The CMS portion was part of parent CMS Energy Corp.'s divestment of its E&P business. -Nissa Darbonne
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