XTO Energy Inc., Fort Worth, Texas, (NYSE: XTO) plans to buy Paul Rady's start-up Barnett Shale company Antero Resources Corp. for approximately $685 million in cash ($337.5 million) and stock (10 million common shares and warrants to buy another 1.5 million). Rady sold Rockies-focused gas producer Pennaco Energy to Marathon Oil Co. in 2001 for approximately $500 million, including net debt of about $54 million. The new deal increases XTO's production and leasehold acreage in the Tarrant County, Texas, core area of the Barnett Shale and expands its acreage in Parker and Johnson counties. XTO estimates proved reserves total 440 billion cu. ft. of gas, 41% proved developed and 100% operated, and potentially 400- to 500 billion cu. ft. of additional gas reserves. The deal comes with ownership of 61,000 net acres with new well spacing of 100 acres. Production from the Antero properties is currently 60 million cu. ft. per day. XTO's 2005 production-growth target could grow to as much as 23%, up from as much as 20%. In the deal pricing, XTO reports it is paying $100 million for undeveloped leasehold and seismic data and $1.33 per thousand cu. ft. of proved gas reserves. The company estimates development costs for the proved undeveloped reserves at 96 cents per thousand cu. ft. "With this acquisition, XTO becomes a leading Barnett Shale producer for all the right reasons," says Bob Simpson, chairman and chief executive officer. "We are purchasing an established base of production and reserves, while securing a unique acreage position in the core area that adjoins XTO's properties...In short, we have added another vital development franchise for the future of XTO." The company's net position in the play is 148,000 acres and it now estimates 1- to 1.5 trillion cu. ft. of reserve potential. By year-end 2006, XTO expects to double its production from the play to 160 million cu. ft. of gas per day. The deal may close in April. Antero staff will stay with the assets through June and executives have agreed to a no-compete in the play for two to three years. Antero management is expected to work on assets in other basins through Antero Resources II. Lehman Brothers was financial advisor to Antero. -A&D Watch
Recommended Reading
Battalion in Compliance with NYSE American after 2023 Meeting
2024-02-13 - Previously, Battalion Oil was not in compliance with the NYSE after failing to hold an annual meeting of stockholders during the fiscal year ending Dec. 31.
JMR Services, A-Plus P&A to Merge Companies
2024-03-05 - The combined organization will operate under JMR Services and aims to become the largest pure-play plug and abandonment company in the nation.
New Fortress Energy Sells Two Power Plants to Puerto Rico
2024-03-18 - New Fortress Energy sold two power plants to the Puerto Rico Electric Power Authority to provide cleaner and lower cost energy to the island.
Tellurian Executive Chairman ‘Encouraged’ by Progress
2024-03-18 - Tellurian announced new personnel assignments as the company continues to recover from a turbulent 2023.
Kissler: OPEC+ Likely to Buoy Crude Prices—At Least Somewhat
2024-03-18 - By keeping its voluntary production cuts, OPEC+ is sending a clear signal that oil prices need to be sustainable for both producers and consumers.