Chaparral Energy Inc., based in Oklahoma City, has entered into an asset purchase agreement with Cabot Oil & Gas Corp. to acquire net production of approximately 2,000 barrels of oil (BOE) equivalent per day and 66,000 net acres in the Panhandle Marmaton play for $160.1 million, subject to pre- and post-closing adjustments. The transaction essentially doubles Chaparral's holdings in the Marmaton play to 126,000 acres and reflects its increased focus on high-quality oil plays with excellent well economics.

Located in Beaver and Texas Counties, Okla., and Ochiltree County, Texas, production from the purchased assets is approximately 81% oil with proved reserves estimated to be 8.4 million barrels of oil equivalent (MMBOE) and unproven reserves estimated to be 24 MMBOE as of the effective date of October 1, 2013.

Chaparral Energy chairman, CEO and president Mark Fischer said that he sees long-term, sustainable growth for the vompany by focusing on the key plays in the Mid-Continent area. Fischer noted, "We have a deep understanding of the geology and economics of this proven play located in our core Mid-Continent operating area where we have consistently demonstrated success in the exploration for and drilling of significant quantities of oil and natural gas. As a result, this particular acquisition gives us the largest position in this active play where we can use our existing presence and success to leverage the efficient development of this additional acreage."

The Cabot acquisition increases Chaparral's growth potential through the addition of approximately 450 drilling locations targeting the Marmaton Lime formation which typically generate rates of return (ROR) in the 40 to 70% range. In addition, this area offers significant upside associated with drilling numerous horizons in this stacked-pay environment. The purchase includes significant infrastructure, including saltwater disposal wells and electricity, which will generate operating efficiencies and economies of scale by supplementing Chaparral's existing footprint.

The acquisition of Cabot's Marmaton assets is scheduled to close on Dec. 18, 2013.

Chaparral is also today announcing that it has engaged an investment banker to divest non-core assets in its Ark-La-Tex and Permian Basin areas. Fischer stated that "The successful completion of the divestiture of these non-core assets, which represents approximately 10% of the company's annual adjusted EBITDA, will allow the company to reduce borrowings under its existing line of credit, fund an increased drilling program associated with the Cabot acquisition and advance our chosen strategy of becoming a pure Mid-Continent player".