2010-07-21-2010-07-21-2010-07-21

Acquired Atlantic Rim working interests in three units, with estimated proved developed reserves of 9 Bcfe.

SM Energy Co. (fka St. Mary Land & Exploration Co.) (NYSE: SM) has sold certain assets in the Atlantic Rim are of southwestern Wyoming to Double Eagle Petroleum Co., Denver, (Nasdaq: DBLE) for approximately $8.4 million.

The assets include three working interests consisting of 3.08%, 12.60% and 1.15% in the Catalina, Sun Dog and Doty Mountain units, respectively. Post-acquisition working interest percentages in the units are 72.40%, 21.54% and 18%, respectively. Upside on the properties include approximately 620 gross well sites.

Double Eagle values the deal metrics at $0.93 per thousand cubic feet of gas equivalent (proved developed), based on estimated proved developed reserves of approximately 9 billion cubic feet equivalent, excluding additional reserves associated with future drilling locations on the units.

Double Eagle paid an aggregate $7.8 million, comprising $1.8 million of cash on hand and a $6 million drawdown on its credit facility. The company currently has $31 million outstanding for its credit facility and a $45-million borrowing base.

The deal closed July 20. The effective date is Jan. 1.

Double Eagle has producing oil and gas assets (95% gas) in the Green River and Washakie Basins in the Rockies region and is targeting exploration opportunities in its Atlantic Rim Niobrara acreage.