ChevronTexaco sells onshore assets for $1.1 billion

ChevronTexaco today announced that its North America Exploration and Production Company has sold 150 onshore producing properties to XTO Energy for $1.1 billion.

ChevronTexaco Corp today announced that its North America Exploration and Production Company has sold a package of 150 onshore producing properties to XTO Energy for $1.1 billion.

The properties are located in seven US states, with more than 90 percent of current production in Texas and New Mexico.

According to ChevronTexaco, the sale is part of plans announced in 2003 to improve the competitive performance of the company’s upstream portfolio through the divestment of non-strategic assets and the realignment of strategic business units. To date, the company has reached agreement to sell approximately two-thirds of production targeted for sale in its ongoing US divestment program.

In the Permian Basin of West Texas and New Mexico, XTO is acquiring 80 million barrels of proved oil equivalent reserves in 16 counties. Net production from the properties is about 11,500 Barrels of Oil Per Day (BOPD) and 40 Mmcf/d of natural gas. Primary producing fields in the area include Yates, Goldsmith, Eunice Monument, Fullerton and Puckett.

XTO is also increasing its position in its Eastern Region with the purchase of 102 Bcfe of proved reserves in Franklin, Freestone, Limestone and Anderson counties of Texas and Claiborne Parish of Louisiana. The net production currently attributable to the properties is about 13 Mmcfe/d.

The company anticipates upside opportunities in the primary producing fields of Teague, Oletha, Bethel, Haynesville and New Hope.

New positions for XTO will be established in the Rocky Mountains and South Texas. In the Rockies, XTO is expanding its coal bed methane presence with the purchase of 67 Bcfe of proved reserves in the Buzzards Bench Field of Emery County, Utah. This property, in the Ferron sand and coal play, is an offset to the Drunkard’s Wash Field and is currently producing about 12 Mmcfe/d. In the South Texas area, the Company is purchasing 54 Bcfe of proved reserves in 9 counties with net production totaling 20 Mmcfe/d.

In the Mid-Continent region, XTO is adding 67 Bcfe of proved reserves from 11 counties in Oklahoma and the Panhandle of Texas. These properties will contribute about 15 Mmcfe/d of natural gas production.

The remaining 16 Bcfe of proved reserves and net production of 3 Mmcfe/d are contained in various royalties and other miscellaneous properties.

The transaction is scheduled to close on or before August 6, 2004 with an effective date of January 1, 2004.