Excerpts from state and
local news wire:
XTO Energy
Announces Fayetteville Shale Leasehold Acquisition
Thursday April 3, 8:00 am ET
FORT WORTH, Texas, April 3,
2008 /PRNewswire-FirstCall/ -- XTO Energy Inc. (NYSE: XTO - News)
announced today that it has entered into a definitive agreement to
acquire producing properties, leasehold acreage and gathering
infrastructure from Southwestern Energy Company (NYSE: SWN - News)
for about $520 million. The purchase includes 55,631 net acres of
Fayetteville Shale leasehold and expands XTO's position in the shale
play to more than 300,000 net acres. "XTO's shale play strategy is
focused on growing our acreage positions in the right geographic and
geological locations across the premier shale basins. This
acquisition expands our visible growth potential in the Fayetteville
Shale," "Given our engineering assessment, we expect the acreage,
which is contiguous to our core development footprint, to hold
resource potential in excess of 1 Tcfe. With the pipeline
infrastructure already in place, our immediate plans include using
four drilling rigs in 2008 and at least six rigs in 2009. We expect
proved reserves attributable to this acquisition to grow to 160 Bcfe
this year and at least 325 Bcfe by year-end 2009. Overall, our
operational teams are dedicated to making XTO a top producer and
value creator in the Fayetteville Shale."
Chesapeake CEO: Economic benefits of Fayetteville Shale drilling
to exceed expectations
Wednesday, Apr 16, 2008
The economic impact
of natural gas drilling in the Fayetteville Shale play will exceed
expectations, and the state should consider forming an endowment
with the proceeds, the CEO of Chesapeake Energy Corp. said Tuesday.
A University of Arkansas study this year estimated the shale play
would generate $17.9 billion and more than 11,000 jobs for the
state's economy through 2012. "We're about to make that completely
irrelevant I think, with what we and others in the industry are
going to do,"
Chesapeake is the second-largest operator in the Fayetteville Shale
play and estimated that natural gas companies would spend between
$75 billion and $100 billion in Arkansas during the
next decade and potentially find 20
trillion cubic feet of natural gas, an amount that at current
natural gas prices would be worth roughly $200 billion in future
revenue.
The Legislature overwhelmingly approved Gov. Mike Beebe's proposal
in a special session this month.
Beginning Jan. 1, the tax will increase from three-tenths of 1 cent
per 1,000 cubic feet to 5 percent of market value, with some
temporary reductions and exemptions. State revenues from the tax are
expected to eventually grow from less than $700,000 last year to
more than $100 million.
Chesapeake and other gas companies operating in the state agreed to
support the tax increase after negotiations with Gov. Beebe and said
Tuesday he was satisfied with the tax hike, although not necessarily
happy about it.
Despite the increase, the company still plans to more than double
its number of rigs in the play from 12 to 25 and drill about 300
wells per year in the state, which Chesapeake first announced in
March. McClendon estimated the company would spend more than $1
billion in Arkansas annually "for as long as we can project."
The impact "will potentially transform this state into an economic
powerhouse of the mid-South," Mclendon said, as long as the
regulatory, legal and tax environments in Arkansas stay competitive
with that of other nearby states with similar shale plays.
Chesapeake Energy
SEECO, the first company to successfully drill
test wells, has been at the forefront of the companies that have
been making substantial investments in developing the Fayetteville
Shale Play. Preliminary estimates, calculated by CBER researchers,
of the economic impact of Fayetteville Shale Play investments made
by SEECO on the six Arkansas counties from 2003 through 2005 showed
economic multipliers of around 1.2. During that period, SEECO direct
expenditures of over $158 million in leasing land and mineral rights
and drilling activities were responsible for total economic activity
of over $190 million in Cleburne, Conway, Faulkner, Johnson, Van
Buren, and White counties.
NEWS RELEASE
SOUTHWESTERN ENERGY ANNOUNCES E&P ASSET SALE
Proceeds to be Used to Fund Capital Programs
Houston, Texas – April 3, 2008…Southwestern Energy Company (NYSE:
SWN) announced today that its wholly-owned subsidiary has entered
into a definitive purchase and sale agreement with XTO Energy Inc.
for the sale of certain oil and gas leases, wells and gathering
equipment held by the company in its Fayetteville Shale play for
approximately $519.6 million in cash. The sale includes 55,631 net
acres, or approximately 6% of the company’s approximately 906,700
net acres in the play as of December 31, 2007, and approximately
10.5 MMcf per day of production from the Fayetteville Shale as of
March 17, 2008. The acreage is located in the southeast portion of
the company's focus area. The transaction is scheduled to close in
the second quarter of 2008.
“The sale of this acreage is in keeping with our focus on present
value and our strategy of rationalizing our assets to fund our
capital program,” stated Harold M. Korell, President and Chief
Executive Officer of Southwestern. “Results have been improving in
recent quarters in the Fayetteville Shale project, our James Lime
drilling looks promising, and we are now drilling our first
Marcellus Shale test. This sale, along with our planned utility and
potential Permian sales, will meet our 2008 capital needs and
position us well as we move into 2009. We expect 2008 to be another
great year for Southwestern.”
Merrill Lynch is Southwestern’s sole financial advisor in connection
with the transaction.
Southwestern Energy Company is an integrated natural gas company
whose wholly-owned subsidiaries are engaged in oil and gas
exploration and production, natural gas gathering and marketing, and
natural gas distribution. Additional information on the company can
be found on the Internet at
http://www.swn.com
.
