Bill Barrett Corporation announced that it has signed a purchase and sale agreement with an affiliate of Vanguard Natural Resources, LLC for the sale of certain of the Company’s non-core natural gas assets including all Wind River Basin natural gas producing properties, the Powder River Basin coal bed methane (“CBM”) assets and a working interest in its Gibson Gulch-Piceance Basin development property.
Total consideration, prior to customary closing adjustments, is $335.0 million and the transaction is expected to close by December 31, 2012.
Chairman, CEO and President Fred Barrett comments: “We are very pleased to execute this transaction with an affiliate of Vanguard Natural Resources, a step that is very closely aligned with our long-term objectives. I would like to emphasize two key points leading to this transaction. One, the monetization of non-core, lower growth assets is part of a prudent long-term strategy to optimize our portfolio and focus investment dollars in programs that offer the highest returns and best long-term growth profile. Two, based on our allocations, this transaction pegs the pre-sale market value of our Gibson Gulch asset at approximately $1 billion, which I believe has not been recognized in the market. Proceeds will be applied to debt reduction in the near term and to fund our low-risk reinvestment opportunities.”
The transaction includes the sale of an initial 18% working interest in Gibson Gulch that progresses to a 26% interest in 2016, and Bill Barrett Corporation will retain operatorship. The transaction proceeds will be adjusted at closing from an effective date of October 1, 2012. At closing, the transaction will include in the three areas approximately: 254,000 net acres of leasehold, predominantly in the Wind River and Powder River basins; 239 Bcfe of total proved reserves (based on year-end 2011); and 50 MMcfe/d of projected 2013 production. The Company retains all of its leases in its emerging Powder River Basin Deep stacked oil play. The Company has the right to propose farmouts, under pre-defined terms, on the Wind River Basin properties to leverage the Company’s experience in this area for exploration upside potential.
LNG World News Staff, November 01, 2012; Image: Bill Barrett Corporation