Fort Worth-based XTO Energy Inc. plans to buy coalbed-methane-producing properties in the San Juan Basin of Colorado for $160 million from J.M. Huber Corp., Edison, N.J. The price averages $1.04 per thousand cu. ft., according to Lloyd Byrne, analyst, Morgan Stanley. The assets include proved gas reserves of 154 billion cu. ft., of which 79% are proved developed producing. Production totals 29 million cu. ft. per day. "Looking into 2003, this acquisition increases gas production growth beyond our organic target," says Bob R. Simpson, XTO chairman and chief executive officer. Brad L. Beago, analyst, Credit Lyonnais Securities (USA) Inc., says, "With this addition, in our view, the company could grow its 2003 natural gas production 14% during a period of improved gas fundamentals, which could bode well for the stock." He maintained his Buy on XTO shares and $26 price target. The assets are in the Ignacio Blanco Field, La Plata County, southwestern Colorado, and contain 128 producing wells, which are situated on 160- and 320-acre spacing. The deal expands the company's exposure to the Fruitland Coal formation, where XTO has increased production and reserves in several fields in New Mexico. XTO expects to fund the purchase with debt. -Petroleum Finance Week
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