Arete to Acquire Oil and Gas Acreage From
DNR, Tindall — including Wyoming Sites

May 1st, 2009 • Filed Under
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(Source: Datamonitor)tracking Arete Industries has signed a definitive agreement to purchase oil and gas properties in Wyoming, Colorado, Kansas, and Oklahoma from DNR Oil & Gas Company and Tindall Operating Company for cash and additional consideration.

The wells being offered by DNR & Tindall total 243, including 46 operating wells (proven developed) and 197 PUDS (proven undeveloped), with a discounted reserve value of the proven developed, and the proven undeveloped of $38 million.

The reserve value assumes a 15% discount and uses pricing of $42 per barrel oil and $5 per Mcf gas. The operating wells at current oil and gas prices will generate net working interest revenues of approximately $3.63 million a year or monthly net working interest revenue of $303,000, all based on oil at $42 per barrel and gas at $5 per Mcf.

Arete had purchased the TOP Gathering System located in Campbell County  in September 2006. This pipeline is connected to DNR’s gas properties in Wyoming and is currently transporting approximately 900,000Mcf of gas per day for the DNR wells and is cash flowing from its operations.

The pipeline has three-times the capacity of gas presently being delivered, based on current compression, and developing the present leases would help fill that capacity, said Arete. The purchase of the pipeline is the first part of Arete’s four-part program of merging, purchasing, developing and acquiring operations in the oil and gas industry.

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