Pogo Producing Company announced today that it has entered into an agreement to acquire all of the stock of Northrock Resources (Northrock), a wholly owned Canadian subsidiary of Unocal Corporation, for $1.8 billion in cash.
Under the agreement, Pogo will acquire 644 Bcfe (billion cubic feet of gas equivalent) of estimated proven reserves on approximately 300,000 net acres, plus approximately 1.1 million net acres of undeveloped leasehold.
Beyond the proven reserves, Houston, Texas-based Pogo believes that Northrock’s properties additionally contain over 200 Bcfe of very high quality probable reserves and more than 500 Bcfe of possible reserves.
After allocating $200 million of the purchase price to Northrock’s sizeable undeveloped leasehold acreage, Pogo’s acquisition cost, if the balance of $1.6 billion were attributed solely to the estimated proven reserves, would be $2.48 per thousand cubic feet equivalent (mcfe).
The Northrock transaction is subject to customary regulatory approvals. It is expected to close during the third quarter of 2005.