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Bill Barrett Sells Uinta Gas Asset For $371 Million – Metrics: $1.40/MCFE Or $5,436/Daily MCFE

|Includes:Bill Barrett Corporation (BBG), VNR

Bill Barrett has signed an agreement with an undiscloded buyer to sell its West Tavaputs natural gas asset located in Uinta Basin, Utah for a consideration of $371 million. The consideration comprises $325 million cash and $46 million for the purchaser's assumption of the lease financing obligation for compressor units on the property.

Asset highlights:

  • Approximately 35,000 net acres comprising 300 producing wells
  • 1P reserves as on end-2012 were 265 Bcfe
  • Net production during Q2-2013 was 68 MMcfe/d

Metrics:

Ascribing the entire deal value of $371 million to 1P reserves/production yields a metric of $1.40/MCFE or $8.41/BOE and $5,436/Daily MCFE or $32,618/Daily BOE. The value of undeveloped acreage is assumed to be insignificant.

The metrics in the current transaction is a tad higher when compared to the metrics ($0.977/MCFE or $5.86/BOE and $4,507/Daily MCFE or $27,040/Daily BOE) in the $335 million Colorado and Wyoming gas assets sale to Vanguard Natural Resources LLC in Jan-2013. In the asset sale to Vanguard, undeveloped acreage was estimated at $200/Acre or $41.62 million for 208,100 net acres.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: BBG, VNR