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Whiting Petroleum To Sell Postle Assets For $859.8 Million

Whiting Petroleum Corporation (NYSE: WLL) announced today that it has signed a purchase and sale agreement to sell to BreitBurn Energy Partners L.P. (NASDAQ: BBEP) certain producing oil and gas properties located in its Enhanced Oil Recovery (EOR) projects in the Postle and NE Hardesty Fields, Texas County, Oklahoma. The sale includes the related gathering and Dry Trail plant processing facilities, oil delivery pipeline, 60% interest in the 120-mile Transpetco-operated CO 2 transportation pipeline, CO 2 supply contracts and certain crude oil swaps. The cash purchase price is $859.8 million, subject to certain post-closing adjustments. The sale is expected to close in July 2013, subject to customary closing conditions, and will have an effective date of April 1, 2013. Whiting will operate the properties under a transition services agreement until October 31, 2013.

James J. Volker, Whiting's Chairman and CEO, commented, "We are pleased with the sale price of these EOR fields. The transaction also allows us to deploy more capital to our core development areas in the Northern Rockies, Central Rockies and Permian Basin. "

Whiting estimates the properties subject to the sale consist of net daily production of approximately 7.64 MBOE/d or 8.6% of its March 2013 production. Whiting estimates the proved developed producing reserves of the properties were approximately 30.7 MMBOE and other proved reserves were 13.5 MMBOE as of April 1, 2013.

Whiting expects the net proceeds from the sale to be approximately $850.6 million after deducting estimated expenses. Whiting will convey its crude oil swaps, as set forth in the table below, to BreitBurn at closing. Whiting expects to use the net proceeds to repay a portion of the debt outstanding under its credit agreement. As of March 31, 2013 the borrowings under the credit agreement were $1.5 billion, which includes $44.9 million as Whiting’s cost of the oil swaps conveyed.

Stock quotes in this article: WLL 

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