?An undisclosed buyer plans to acquire mature, producing assets in the Denver-Julesburg Basin in northeastern Colorado from Berry Petroleum Co., Denver, (NYSE: BRY) for approximately $154 million, representing essentially all of the company’s properties in the region.


Berry holds approximately 110,000 net acres with more than 1,100 producing Niobrara wells in Yuma County. Production is approximately 18 million cu. ft. per day. At year-end 2008, proved reserves were 21 million BOE. The deal represents 8.5% of Berry’s total proved reserves and 5.1% of proved and probable. Also, the deal involves midstream assets and an associated gas hedge for six months valued at $14 million.


In June 2008, Berry acquired 4,500 net acres in East Texas for $653 million.


The deal is expected to close by April 1. Berry will use proceeds to pay debt. Scotia Waterous advised Berry. Pritchard Capital Partners analysts value the deal at $7,777 per daily flowing Mcfe. Tudor, Pickering, Holt & Co. analysts describe the deal as a “decent price for a Rockies-area punt that gets Berry out of the debt-laden penalty box.”


Assuming a sale price of $140 million for the upstream assets (with no value given to the midstream), the TPH analysts estimate Berry is receiving $1.10 per Mcfe for proved reserves and $47,000 per flowing bbl. of oil equivalent. They also believe Berry is marketing an East Texas midstream package that could bring an additional $25- to $35 million.

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