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Denver Company Acquires Interest in Panhandle Oil Field

Posted on: Thursday, 28 July 2005, 18:01 CDT

Jul. 28--Whiting Petroleum Corp. of Denver has agreed to buy an interest in a Panhandle oil field along with a field in West Texas for $802 million, the company said Wednesday.

The Oklahoma purchase is scheduled to close Aug. 4, and the Texas property is expected to be completed about a month later. Whiting is buying rights to both fields from Midland, Texas-based Celero Energy.

"This acquisition reflects our strategy of adding quality, long-lived reserves at attractive prices," James J. Volker, Whiting's chairman, president and chief executive officer, said Wednesday during an analyst conference call. "The purchase price fits our plan to grow our asset base through acquisitions and subsequent development."

The Postle field in Texas County includes about 88 producing wells and 78 injection wells with an average daily production of about 4,350 barrels of oil and 400,000 cubic feet of natural gas.

Volker said his company expects to spend about $111 million in the next two years to increase production in the Oklahoma field by about 40 million barrels of oil equivalent.

The deal also includes properties in the North Ward Estates field in Texas' Ward and Winkler counties. Those properties include 523 producing wells and 149 injection wells.

John B. Kelso, Whiting's director of investor relations, said the company has offered jobs to all 40 of the Celero employees working in the two fields.

Mickey Thompson, president of the Oklahoma Independent Petroleum Association, praised the purchase and the pledge of further investment as a boon for the state's energy industry.

"Oklahoma is still an investment-poor place, and the reality is we have to look to other places for capital," he said. "This kind of investment is creating jobs in the Panhandle of Oklahoma and is going to create new tax revenue in the state of Oklahoma. We're happy to have that Colorado money flowing downhill."

Whiting's actions also prove the state still contains large amounts of oil, as long as the price is high enough, Thompson said.

"I think this is the latest greatest example of how this sustained price level is providing the opportunity to go back into fields that some people may have written off," he said. "The $20 barrel traditional convention is that all these old, declining oil fields are not going to do anything but decline. But obviously somebody thinks that at $55 a barrel, this old oil field still has some life in it."

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WLL,

Source: The Daily Oklahoman

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