Newfield Exploration Co., Houston, (NYSE: NFX) plans to buy Rockies assets from Stone Energy Corp., Lafayette, La., (NYSE: SGY) for $575 million.

Proved reserves are 200 billion cu. ft. equivalent (72% gas; 52% developed; 15-year reserve life); probable and possible are more than 150 billion equivalent. Net daily production is approximately 40 million equivalent. Net acreage is 600,000. The deal was expected to close in June.

"We entered the Rockies in 2004 with our acquisition of the giant Monument Butte Field in the Uinta Basin," says David Trice, Newfield chairman, president and chief executive. "Since that time, we've grown production more than 40% and doubled our acreage position in the Uinta while looking for the 'right' transaction to significantly increase our footprint in the Rockies. Today's announcement does just that!"

Financing will be from a credit facility and, ultimately, through additional asset divestments.

"We intend to market our assets in Bohai Bay, China, our properties in the U.K. North Sea and some smaller packages along the onshore Texas Gulf Coast and in the Midcontinent, as well as some properties in the shallow-water Gulf of Mexico. We are excited about the 'new' Newfield and our prospects to add future value for our shareholders."

More than half of the proved reserves in the Stone package are in the Pinedale Field in the Green River Basin, Sublette County, Wyoming. Newfield will own interests in approximately 8,000 gross acres (4,000 net acres) in the southeastern portion of the anticline. Net daily production is 12 million equivalent from 27 wells.

Some 15% of the proved reserves are in the Jonah Field. Current net production is approximately 8 million equivalent per day from 17 wells.

Some 35 billion equivalent of proved reserves and 75,000 net acres are in the Williston Basin of Montana and North Dakota. Current net production is approximately 2,200 BOE per day from about 140 wells. Drilling opportunities targeting the Bakken, Madison and Red River formations have been identified. Newfield currently holds 65,000 net acres in the Williston associated with its Big Valley, Watford and Arnegard prospect areas.

Some 12 billion equivalent of proved are in the Scott Field of the Powder River Basin (Converse County, Wyoming). Newfield will acquire an interest in 14,000 net acres and will have an average working interest of nearly 85%.

The deal also comes with additional exploration opportunities in the Wind River Basin of Wyoming; the Southern Alberta Basin in Glacier County, Montana; the Uinta Basin in Carbon County, Utah; and the Northern Denver-Julesburg (DJ) Basin in Platte County, Wyoming.

David Welch, Stone CEO, says, "The sale of our Rocky Mountain properties will provide us with the proceeds to materially reduce our debt position, just as we planned back in January."

Merrill Lynch Petrie Divestment Advisors advised Stone on the sale.



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