Encore Acquisition Co., Fort Worth,Texas, (NYSE: EAC) plans to acquire oil and ga.s properties in the Williston Basin in Montana and North Dakota from Howell Petroleum Corp. and Kerr- McGee Oil and Gas Onshore LP, subsidiaries of Anadarko Petroleum Corp., The Woodlands, Texas, (NYSE: APC) for $410 million in cash. Encore is also buying properties in the Big Horn Basin in Wyoming from Anadarko for $400 million in cash. The Williston Basin properties involve more than 50 fields with approximately 70,000 net acres in the Bakken play in Montana and North Dakota. Production is 5,000 net barrels of oil equivalent per day. Total proved reserves are approximately 21 million barrels equivalent (90% oil, 81% proved developed producing). Anadarko operates approximately 93% of the properties, and Encore will operate 85% after closing.
Pro forma, Encore’s production in the Williston Basin will be 9,350 barrels equivalent per day with proved reserves of 41 million barrels equivalent (93% oil, 85% proved developed producing) and probable reserves of 11 million barrels equivalent.
Encore chief executive and president Jon S. Brumley says, “We are very excited to be entering the Bakken play with a large
acreage position in an active emerging play. This acquisition has significant upside potential with 4 million barrels of oil equivalent in the proved undeveloped category and 9 million barrels of oil equivalent in the probable category.” Anadarko chairman, president and chief executive Jim Hackett says, “This sale, coupled with last week’s announcement to divest additional oil-producing properties in Wyoming, concludes the northern Rockies portion of our asset divestiture plan.”
Encore will fund both acquisitions from cash on hand and one or more credit facilities provided by Bank of America. Encore intends to divest of certain properties in the Anadarko Basin, Arkoma Basin and the Barnett Shale in the Fort Worth Basin.
Credit Suisse Securities (USA) LLC is financial advisor to Encore, Lehman Brothers is financial advisor to Anadarko and Tristone Capital marketed the assets. The deal is expected to close in April.
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