XTO Energy acquires San Juan basin coalbed methane producing properties

Petroleum News Alaska

XTO Energy Inc. of Fort Worth, Texas, said Nov. 25 that it has a definitive agreement with J.M. Huber Corp. of Edison, N.J., to purchase coalbed methane producing properties in the San Juan basin of Colorado.

The $160 million acquisition is 28,491 gross (15,982 net) acres in the Ignacio Blanco field in La Plata county in southwestern Colorado and includes 128 producing wells on 160-acre and 320-acre spacing. XTO said its engineers have estimated proved reserves of 154 billion cubic feet of gas of which 79 percent are proved developed producing and said the acquisition will add about 29 million cubic feet per day of long-lived gas production to its existing production base.

“This transaction reinforces our ongoing commitment to provide a long-term growth strategy for XTO,” Bob Simpson, XTO chairman and CEO, said in a statement.

He said the acquisition “provides low-risk production growth” and will increase 2003 gas production growth beyond the company’s 10-12 percent target.

The San Juan Basin acquisition expands XTO’s interests in “the highly prolific Fruitland coal formation” where it has “significantly increased production and reserves in several fields in New Mexico,” the company said. Sixty-three percent of the purchase is subject to a preferential purchase right. The transaction is expected to close Dec. 30, with an effective date of Oct. 1. XTO said the purchase will be funded through existing bank lines.