Barrett completes sell-off of natural gas assets

Bill Barrett Corp. this week closed on its previously announced sale of natural gas assets including a partial interest in its holdings south of Silt.

Vanguard Natural Resources, LLC, on Monday acquired a working interest in what Barrett Corp. calls its Gibson Gulch development property, as well as all its Wind River Basin gas-producing properties in Wyoming, and its coal bed methane assets in Wyoming’s Powder River Basin.

The transaction’s $335 million total value was preliminarily adjusted to the Oct. 1, 2012, effective date and for other customary closing adjustments, providing net proceeds to Bill Barrett Corp. of $329 million, the company said.

The deal gives Houston-based Vanguard an initial 18 percent Gibson Gulch interest that will grow to 26 percent by 2016.

It comes as Barrett has refocused its exploration and development on oil rather than natural gas, due to the current pricing disparity between the two fuels. The company last year suspended its drilling in Gibson Gulch. Still, it says the sale placed a presale value of $1 billion on its assets there.

As of Sept. 30,  Barrett’s net Gibson Gulch production was 149 million cubic feet equivalent per day, a figure that also includes some oil and natural gas liquids, and it had an estimated 98 percent working interest in production from 935 wells there.

In December, Antero Resources sold its Piceance Basin oil and gas assets, which are in Garfield County, to Ursa Resources Group II LLC for $316 million. Antero is focusing on developing holdings in the eastern United States that produce oil, and also natural gas with a high content of liquids such as propane and ethane.

Barrett is using the sale proceeds to pay off its $250 million revolving credit facility, with the remainder to go toward its 2013 capital development.

Also this week, Bill Barrett Corp. said its production from its West Tavaputs development area in northeastern Utah is up to about 90 percent of what it was before a November fire at its Dry Canyon compressor station about 30 miles northeast of Price. The fire did extensive damage to the facility, and Barrett initially was forced to shut in many of its wells in the area, suspending production from them. A bypass pipeline to redirect gas to another compressor station was completed and put in service Dec. 13.

Two Barrett employees were injured in the fire and taken to the University of Utah Health Care Burn Center. As of late November, one of the employees had been released from the hospital but the other was continuing to be treated there, the company previously has said.


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