2009-07-08-2009-06-15-2009-06-15

Acquired 90% WI in 40,300 undeveloped acres in Cottonwood Gulch (former Naval Oil Shale Reserve #1), in Piceance Basin, CO., gaining 2 Tcfe 2P.

Bill Barrett Corp., Denver, (NYSE: BBG) has acquired a 90% working interest in approximately 40,300 undeveloped acres in Cottonwood Gulch, the former Naval Oil Shale Reserve #1, in the Piceance Basin of western Colorado from an undisclosed seller for $60 million. The properties are adjacent to the Rulison and Parachute fields on federal lands with an 87.5% net revenue interest and 10-year leases issued in 2008. The company estimates the acquisition adds more than 2 trillion cubic feet equivalent of probable and possible resources. Bill Barrett chairman and chief executive Fred Barrett says, "The combination of material resource potential, a contiguous lease position, attractive commercial terms and proximity to infrastructure make this acquisition unique…Our company is exceptionally positioned to execute efficiently in this area, having pioneered operations and geologic concepts that unlocked the vast potential in the Piceance. We have long recognized the potential of these lands." Barrett says the acquisition is expected to more than triple the company's current 3P (proved, probable and possible) resource estimates in the Piceance to more than 3 trillion cubic feet equivalent. Development of the acreage position is being coordinated with the Department of Interior and Bureau of Land Management and is expected to begin as early as next year. Bill Barrett financed the acquisition with its bank line of credit. Following this acquisition, availability under the company's credit facility was $294 million. Valuing the package at $1,489 per acre, Stifel, Nicolaus & Co. Inc. anaylyst Michael Hall says the purchase price "compares nicely to the August 2008 Roan Plateau lease sale which went for $2,383 per acre, assuming an equal net revenue interest of 87.5%."