XTO acquires San Juan basin gas producing properties

Fort Worth, Texas-based XTO Energy said June 5 that it has an agreement with Markwest Hydrocarbons of Denver, Colo., to acquire coalbed methane and natural gas producing properties in the San Juan basin of New Mexico and Colorado for $60.5 million.

XTO said its internal engineers estimate proved reserves to be 50 billion cubic feet of gas equivalent of which 78 percent are proved developed. The company said the acquisition adds some 9.5 million cubic feet per day to its existing gas production.

“Over the past six months, XTO has been very effective in acquiring choice gas properties to supplement our strong internal growth,” said Bob Simpson, XTO chairman and CEO. “This deal highlights our continuing success in expanding XTO’s core areas with the right opportunities.”

“Long-lived gas production with solid, low-risk upsides have built our company,” said Steffen Palko, vice chairman and president. “These assets fit perfectly into our operational expertise.”

The properties to be acquired are in La Plata County of southwestern Colorado and San Juan County of northwest New Mexico and will increase XTO holdings in the San Juan basin by 15,300 gross (7,663 net) acres and add another 115 operated wells. XTO said more than 70 percent of its current gas production is attributable to the highly prolific Fruitland Coal formation. This transaction is scheduled to close on June 30 with an effective date of June 1.