BG Group, the UK oil and gas company, today announced that it has entered into an agreement to acquire El Paso Oil and Gas Canada (El Paso Canada) from El Paso Corporation for $345.6 million.
El Paso Canada holds approximately 690,000 net acres of oil and gas, of which 630,000 is undeveloped, which BG believes holds ‘considerable exploration potential.’
The acreage is located in four areas in the Western Canadian Sedimentary Basin, mostly in southern and western Alberta and north eastern British Columbia.
‘This acquisition secures valuable producing and exploration properties, and is another step forward in building our position in the North American gas market,’ said Martin Houston, President, British Gas US Holdings LLC. ‘The very large position of undeveloped oil and gas acreage provides significant opportunities for expansion and development.
‘With a large inventory of identified prospects, the acquisition has enough opportunities to support a drilling campaign for many years.’
The large exploration potential is said to be supported by recent exploration successes. According to an independent evaluation by Ryder Scott, the properties contain 132 billion cubic feet of gas equivalent (bcfe) of proved reserves, of which some 84% is natural gas.
The transaction is expected to close by the end of the first quarter of 2004.