ESCR to expand Atlantic Rim Holdings

Escalera Resources Co. (ESCR) announced that it has signed an asset purchase and sale agreement for the strategic acquisition of producing wells and leasehold interests from Warren Resources, Inc.

The assets, located in the Atlantic Rim Area of the Washakie Basin, Wyoming, are highly complementary to Escalera's existing holdings and consist primarily of Warren's 74% operated working interest in the Spyglass Hill Unit (in which Escalera already holds a 22% non-operated working interest), an 11% non-operated working interest in Escalera's Catalina Unit (of which Escalera operates with an 86% interest), and midstream gathering and pipeline assets within the Spyglass Hill Unit. Current production from the assets is approximately 14 million ft3/d and proved developed reserves were 83 billion ft3 as of 1 April, 2015.

The Spyglass Hill Unit covers approximately 97 000 gross acres and Warren currently operates 367 producing and injection wells in the unit. Production from the Spyglass Hill Unit currently feeds into a Wyoming Interstate Company pipeline through the midstream assets that are part of the transaction and include a 59 mile long pipeline. The acquisition also includes certain deep rights' interests in the Atlantic Rim.

Charles F. Chambers, Escalera's Chief Executive Officer, commented, "This acquisition will consolidate the major operating and economic interests in the Atlantic Rim, and is expected to be immediately accretive to cash flows, allowing for a more cost efficient capital allocation and decision-making framework for operations in the area moving forward."

The transaction has an effective date of 1 April, 2015, with an expected closing in mid-August 2015, and is subject to confirmatory due diligence and the arrangement of financing.

Adapted from press release by Hannah Priestley-Eaton

Published on 17/06/2015


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