Nov. 1, 2012
/PRNewswire/ -- Bill Barrett Corporation (NYSE: BBG) announced today that it has signed a purchase and sale agreement with an affiliate of Vanguard Natural Resources, LLC for the sale of certain of the Company's non-core natural gas assets including all Wind River Basin natural gas producing properties, the Powder River Basin coal bed methane ("CBM") assets and a working interest in its Gibson Gulch-Piceance Basin development property. Total consideration, prior to customary closing adjustments, is
and the transaction is expected to close by
December 31, 2012
Chairman, CEO and President
comments: "We are very pleased to execute this transaction with an affiliate of Vanguard Natural Resources, a step that is very closely aligned with our long-term objectives. I would like to emphasize two key points leading to this transaction. One, the monetization of non-core, lower growth assets is part of a prudent long-term strategy to optimize our portfolio and focus investment dollars in programs that offer the highest returns and best long-term growth profile. Two, based on our allocations, this transaction pegs the pre-sale market value of our Gibson Gulch asset at approximately
, which I believe has not been recognized in the market. Proceeds will be applied to debt reduction in the near term and to fund our low-risk reinvestment opportunities."
The transaction includes the sale of an initial 18% working interest in Gibson Gulch that progresses to a 26% interest in 2016, and Bill Barrett Corporation will retain operatorship. The transaction proceeds will be adjusted at closing from an effective date of
October 1, 2012
. At closing, the transaction will include in the three areas approximately: 254,000 net acres of leasehold, predominantly in the Wind River and Powder River basins; 239 Bcfe of total proved reserves (based on year-end 2011); and 50 MMcfe/d of projected 2013 production. The Company retains all of its leases in its emerging Powder River Basin Deep stacked oil play. The Company has the right to propose farmouts, under pre-defined terms, on the Wind River Basin properties to leverage the Company's experience in this area for exploration upside potential.
This press release contains forward-looking statements, including statements regarding the expected closing of the aforementioned transaction and potential uses of funds. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Please refer to the Company's Annual Report on Form 10-K for the year-ended
December 31, 2011
filed with the SEC, and other filings including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for a list of certain risk factors that may affect these forward-looking statements.
Actual results may differ materially from Company projections and can be affected by a variety of factors outside the control of the Company including, among other things: oil, NGL and natural gas price volatility; costs and availability of third party facilities for gathering, processing, refining and transportation; the ability to receive drilling and other permits and rights-of-way; regulatory approvals, including regulatory restrictions on federal lands; legislative or regulatory changes, including initiatives related to hydraulic fracturing; exploration risks such as drilling unsuccessful wells; higher than expected costs and expenses, including the availability and cost of services and materials; unexpected future capital expenditures; economic and competitive conditions; debt and equity market conditions, including the availability and costs of financing to fund the Company's operations; the ability to obtain industry partners to jointly explore certain prospects, and the willingness and ability of those partners to meet capital obligations when requested; declines in the values of our oil and gas properties resulting in impairments; changes in estimates of proved reserves; development drilling and testing results; the potential for production decline rates to be greater than we expect; performance of acquired properties; compliance with environmental and other regulations; derivative and hedging activities; risks associated with operating in one major geographic area; the success of the Company's risk management activities; title to properties; litigation; environmental liabilities; and, other factors discussed in the Company's reports filed with the SEC. Bill Barrett Corporation encourages readers to consider the risks and uncertainties associated with projections and other forward-looking statements. In addition, the Company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.