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Berry expands interests Evergreen plans 40 Kansas wells next year; Carbon deal to close soon Debra Beachy Petroleum News Contributing Writer
In separate transactions, Berry Petroleum Co. has expanded its Rocky Mountain holdings and sold off Kansas property. Berry bought Brundage Canyon properties in Utah for $48.6 million and plans to establish a new core area in the Rockies, the company said Aug. 28.
In a separate transaction, Berry sold 43,000 net acres of non-producing leases, including the Forest City Basin of eastern Kansas, to Evergreen Resources Inc.
Evergreen's Investor Relations Director John Kelso told Petroleum News that Evergreen's acquisition of 43,000 net acres in the Forest City basin brings the company's total acreage position in eastern Kansas to more than 520,000 acres.
“We plan to drill at least 40 coalbed methane wells in several separate areas on this acreage in the fourth quarter of 2003, with an objective to establish production and book reserves by early 2004,” Kelso said.
Evergreen spokesman Jack Ekstrom said the company “will base future activity on the results from those wells.”
Under the terms of the sale, Berry will retain an overriding royalty interest, Berry said Aug. 28.
Denver, Colo.-based Evergreen is also expanding through the recent acquisition of Carbon Energy, whose areas of operations are in the Piceance basin in Colorado, the Uintah basin in Utah and central Alberta and southeast Saskatchewan in Canada. That deal is expected to close in 30 days, Ekstrom said. Utah property from Williams Berry bought the Brundage property, with an output of 1,800 barrels of oil equivalent per day of light crude and natural gas from Williams Production RMT Co., a unit of Williams. The 43,500-acre property, with proven reserves of 8.6 million barrels of oil equivalent, is in the Uinta Basin of the Rocky Mountains, in northeastern Utah. Seventy-five percent of the proven reserves are light oil, while 25 percent are natural gas, the company said.
Berry CEO Jerry Hoffman said the acquisition fits the company’s “strategy of establishing a new core area in the Rocky Mountain region.
“Our goal is to operate these assets as efficiently as possible and begin development immediately. Our Denver office will manage these assets, as well as our existing coalbed methane prospective acreage in Kansas and Illinois. The company continues to evaluate additional Rocky Mountain and Midcontinent opportunities,” Hoffman said.
Berry plans to start a $16 million well drilling program this year on the Brundage property with operating costs of about $7.50 boe, the company said.
Berry’s vice president of corporate development, Michael Duginski, said the Brundage Canyon’s productive limit to the south and west have not yet been determined. However, more than 50 proved undeveloped locations and 25 locations behind pipe recompilations have been identified in the field’s productive area, he said.
“This acquisition develops a foothold for Berry to continue it’s growth plan in the Rockies,” he added.
Hoffman also announced that Logan Magruder has joined Berry as its vice president of the Rocky Mountain and Midcontinent Region. Magruder held similar positions with Calpine and Barrett Resources and served as a consultant to Berry since Feb. 1, 2003.
Berry is an independent oil and gas production company based in Bakersfield, Calif.
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