?An undisclosed buyer plans to acquire mature, producing assets in the Denver-Julesburg Basin in northeastern Colorado from Berry Petroleum Co., Denver, (NYSE: BRY) for approximately $154 million, representing essentially all of the company’s properties in the region.
Berry holds approximately 110,000 net acres with more than 1,100 producing Niobrara wells in Yuma County. Production is approximately 18 million cu. ft. per day. At year-end 2008, proved reserves were 21 million BOE. The deal represents 8.5% of Berry’s total proved reserves and 5.1% of proved and probable. Also, the deal involves midstream assets and an associated gas hedge for six months valued at $14 million.
In June 2008, Berry acquired 4,500 net acres in East Texas for $653 million.
The deal is expected to close by April 1. Berry will use proceeds to pay debt. Scotia Waterous advised Berry. Pritchard Capital Partners analysts value the deal at $7,777 per daily flowing Mcfe. Tudor, Pickering, Holt & Co. analysts describe the deal as a “decent price for a Rockies-area punt that gets Berry out of the debt-laden penalty box.”
Assuming a sale price of $140 million for the upstream assets (with no value given to the midstream), the TPH analysts estimate Berry is receiving $1.10 per Mcfe for proved reserves and $47,000 per flowing bbl. of oil equivalent. They also believe Berry is marketing an East Texas midstream package that could bring an additional $25- to $35 million.
Recommended Reading
US Oil, Gas Rig Count Falls to Lowest Since January 2022
2024-05-03 - The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023.
Pemex Reports Lower 2Q Production and Net Income
2024-05-03 - Mexico’s Pemex reported both lower oil and gas production and a 91% drop in net income in first-quarter 2024, but the company also reduced its total debt to $101.5 billion, executives said during an earnings webcast with analysts.
Chouest Acquires ROV Company ROVOP to Expand Subsea Capabilities
2024-05-02 - With the acquisition of ROVOP, Chouest will have a fleet of more than 100 ROVs.
SLB, OneSubsea, Subsea 7 Sign Collaboration Deal with Equinor
2024-05-02 - Work is expected to begin immediately on Equinor’s Wisting and Bay Du Nord projects.
SilverBow Makes Horseshoe Lateral in Austin Chalk
2024-05-01 - SilverBow Resources’ 8,900-foot lateral was drilled in Live Oak County at the intersection of South Texas’ oil and condensate phases. It's a first in the Chalk.