(Source: Datamonitor)
The Williams Companies has agreed to purchase additional properties in the Piceance Valley east of the company's existing assets from a private company for approximately $258 million. The parties expect the transaction to close near the end of the third quarter of 2009.
The assets, which are geologically similar to other Williams's assets in the Piceance Valley, could represent an estimated 795 billion cubic feet equivalent (bcfe) of net reserves. Of the estimated reserves, approximately 150bcfe are proved.
In addition, the properties contain exploration upside from deeper formations and additional potential locations. Not including the new properties, Williams currently owns approximately 190,000 net acres in the Piceance Basin.
The purchase covers 21,800 net acres and includes 28 wells currently producing 24 million cubic feet equivalent per day (mmcfe/d), related gas and water gathering facilities, 94 approved drilling permits and more than 800 drillable locations at 10-acre spacing.
Steve Malcolm, chairman, president and CEO of Williams, said: "We've identified an opportunistic bolt-on acquisition that allows us to quickly add meaningful reserves, production, cash flows and earnings per share by leveraging off of the strength of our low cost structure in the Piceance Basin."
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