Altogether, Endeavour has acquired interests in 526,000 gross acres in these four areas for an approximate $27m initial investment.
William Transier, chairman, CEO and president of Endeavour, said: “These acquisitions represent a major step in Endeavour’s strategy to establish a growth oriented portfolio of onshore properties in the US to complement our development and producing assets in the UK.”
Endeavour funded the initial cash contributions for these new joint ventures from existing cash reserves. Future drilling costs are expected to be funded from existing cash balances, expanding credit capacity and potential capital market activity.
The company entered into a participation agreement with Cohort Energy (a subsidiary of J-W Operating Company) to acquire 50% of Cohort’s interests in approximately 66,000 gross acres in North Louisiana/East Texas and Western Pennsylvania. Endeavour’s initial investment in the Haynesville and Marcellus gas shale plays is $15m, and the company will pay a share of Cohort’s drilling and completion expenditures as wells are drilled over the next few years.
This transaction is in addition to the acquisition of producing assets from Cohort in North Louisiana and East Texas previously announced on October 30, 2009. The company could participate in drilling more than 500 horizontal wells over the next 10-15 years in the two resource plays.
Endeavour acquired 50% of Hillwood Energy Alabama’s position in Hillwood’s unproven, but highly prospective new multi-target gas shale play in Alabama. The company’s leasehold position covers approximately 160,000 gross acres. The initial investment is approximately $8m. The companies plan to drill four wells in the first half of 2010 to test this evolving play. If successful, as many as 400 well locations are available on existing acreage.
Endeavour has also acquired 50% of the interests owned by a private company in more than 300,000 gross acres in central Montana in a highly prospective, but previously unproven, multiple-reservoir oil play. The company paid an initial cash consideration of $3.75m in October, 2009.
Endeavour is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the US.
