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Endeavour International adds four gas shale plays in US to expanding portfolio

The significance of gas shale plays in the United States was reiterated once again this morning, when Endeavour International Corp (NYSE Amex: END & LSE: ENDV) announced that it would shell out US$27 million to gain a larger foothold in the Haynesville and Marcellus gas shale plays in Louisiana/Texas and Pennsylvania.  Endeavour also snapped up stakes in two frontier gas shale plays in Alabama and Montana as part of the deal, which will see the company acquire interests in approximately 526,000 gross acres (165,000 net).

"These acquisitions represent a major step in Endeavour's strategy to establish a growth oriented portfolio of onshore properties in the United States to complement our development and producing assets in the UK," said
William L. Transier, chairman, chief executive officer and president. "…Anticipated production from these plays combined with our North Sea development projects has the potential to grow Endeavour's production to meet our previously stated five-year production goal of 40,000 barrels of oil equivalent per day, balanced between the US and UK.

Endeavour has entered into an agreement with Cohort Energy to acquire a 50% interest in 66,000 gross acres in the Haynesville and Marcellus gas shale plays in north Louisiana/east Texas and Western Pennsylvania for US$15 million. Endeavour will also pay a share of Cohort’s drilling and completion programs. “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,” Endeavour noted.

 "This transaction represents the second part of a broad joint venture Endeavour has established with Cohort and J-W Operating Company," said Transier. "Cohort has a track record of success as an operator in the Barnett shale play that will serve us well in the exploitation of these highly prospective positions in the Haynesville and Marcellus shale plays."

Endeavour added that it could participate in drilling more than 500 horizontal wells over the next 10 - 15 years in the two resource plays.

Endeavour also acquired a 50% stake in two frontier gas shale plays in Alabama and Montana, which it said would give it “first mover” advantage in two highly prospective areas. In Alabama, four wells are scheduled for drilling in the first half of 2010 with partner Hillwood Energy.

Disclosure: I do not hold a position