Escalera Buying Wells, Leaseholds in Atlantic Rim

July 2015, Vol.242, No. 7

Escalera Resources has agreed to buy producing wells and leasehold interests from Warren Resources. The deal is expected to in mid-August.

The assets, located in the Atlantic Rim Area of the Washakie Basin, WY, are complementary to Escalera’s existing holdings and consist primarily of Warren’s 74% operated working interest in the Spyglass Hill Unit that Escalera already holds a 22% non-operated working interest.

Additionally, the company will acquire an 11% non-operated working interest in the Catalina Unit, which Escalera operates with an 86% interest, and midstream gathering and pipeline assets within the Spyglass Hill Unit. Current production from the assets is about 14 MMcf/d and proved developed reserves were 83 Bcf as of April 1.

The Spyglass Hill Unit covers 97,000 gross acres, and Warren operates 367 producing and injection wells in the unit. Production from the Spyglass Hill Unit feeds into a Wyoming Interstate Company (WIC) pipeline through the midstream assets that are part of the transaction and include a 59-mile. The acquisition also includes certain deep rights interests in the Atlantic Rim.

“This acquisition will consolidate the major operating and economic interests in the Atlantic Rim, and is expected to be immediately accretive to cash flows, allowing for a more cost efficient capital allocation and decision-making framework for operations in the area moving forward,” said Escalera CEO Charles F. Chambers.

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