Barrett continues to offload assets in natural gas

Bill Barrett Corp., which last year agreed to sell off a partial interest in its holdings south of Silt, said Wednesday it also is divesting itself of a natural gas project in northeastern Utah as it continues its increasing shift to oil development.

The company said it is selling its West Tavaputs property in the Uinta Basin to an undisclosed buyer for $371 million. The assets include 300 producing wells, about 35,000 acres of oil and gas interests, 265 billion cubic feet equivalent of proved reserves and 68 million cubic feet equivalent per day of production.

With the sale, Bill Barrett Corp. by year’s end will be producing about 40 percent oil, it says. The company has been shifting to oil production because of higher oil prices compared to gas.

Last year it announced the sale to Vanguard Natural Resources, LLC, of a working interest in the Gibson Gulch natural gas property south of Silt in the Piceance Basin, as well as gas and coal bed methane assets in Wyoming. Vanguard will end up with 26 percent ownership of the Gibson Gulch assets by 2016 under that $329 million sale.

Also last year, Antero Resources sold its natural gas project in the Piceance Basin to Ursa Resources Group II, while this year Caerus Oil and Gas LLC bought PDC Energy’s Piceance Basin gas assets. Both Antero and PDC wanted to focus on more liquids-rich projects.

Both Ursa and Vanguard continue to be in the market for more gas projects. But Don Simpson, vice president of business development at Ursa, said Ursa was aware of the Utah property being up for sale “but it wasn’t something that we really liked a lot” and it’s not the buyer.

Lisa Godfrey, who works in investor relations for Vanguard, also said her company isn’t involved in the purchase.

Matt Wurtzbacher, president and chief operating officer of Caerus, said he can’t comment on whether his company is buying the Barrett assets.

However, he said Caerus remains interested in acquiring more gas-production assets, both in the Piceance Basin and elsewhere. Just as Ursa and Vanguard have done, Caerus is voicing optimism in natural gas prices in the long term.

“We believe it’s cyclical and we’re in a low price environment right now but that won’t continue forever,” Wurtzbacher said.

Bill Barrett Corp. hasn’t been drilling recently at Gibson Gulch or West Tavaputs due to low prices, but has been pursuing oil-based projects in the Uinta Basin and in northeast Colorado. In a news release, Barrett said the Utah sale is consistent with company goals including divesting of projects where the company isn’t actively investing.

Barrett said the Utah purchase includes about $46 million for the buyer’s assumption of a lease financing obligation for compressor units on the property.

Its stock fell 3 percent Wednesday after the sale announcement.


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