2008-09-24-2007-12-09-2008-01-16

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$284.0MM
Description

Bought TX Barnett shale assets, gaining production of 14 MMcfe/d.

Range Resources Corp., Fort Worth, (NYSE: RRC) has closed its acquisition of properties in the Barnett shale in the Fort Worth Basin from DTE Energy, Detroit, (NYSE: DTE) and privately held Adexco Petroleum Co., Fort Worth, Texas, for a total of $305 million. Assets from both acquisitions include approximately 14,000 net acres in Dallas, Tarrant, Denton, Johnson, Ellis, Parker and Hill counties, 73% held by production. Production is 14 million cubic feet per day from 51 wells, and is expected to increase to approximately 18 million per day in first-quarter 2008 as several new wells are put online. Range has identified 183 drilling locations. Proven and unproven reserves are 334 billion cubic feet equivalent. Range paid DTE approximately $268 million for assets that include proved and probable reserves of 153 billion cubic feet of gas equivalent on 11,000 net acres. Range paid Adexco approximately $37 million. Range's position in the Barnett shale is now 104,000 net acres and production has increased to more than 90 million cubic feet equivalent per day. Range financed the purchase from its bank credit facility. Range has identified several noncore properties from its existing property base that it plans to sell in 2008 to help fund the acquisition. Production from the acquired properties is expected to offset production lost through these sales. DTE has retained 44,000 acres in the western Barnett shale for continued development. The company has 108 gross producing wells on its western Barnett acreage, primarily in Jack, Erath and Parker counties. JPMorgan Securities Inc. was financial advisor to DTE. Standard & Poor's Ratings Services reports the ratings and outlook on Range Resources (BB/Stable/--) will not immediately change. Range expects to sell some holdings to pay a portion of bank debt incurred to fund this acquisition, limiting the lasting effect on debt leverage. S&P expects the company to selectively undertake acquisitions in its core areas of operations, such as the Barnett, as part of its acquire-and-exploit growth strategy. S&P also reported that the sale has no immediate effect on DTE's credit rating (BBB/Stable/A-2). The sale reflects DTE's continuing efforts to reduce its exposure to nonregulated businesses.