Foothills Exploration Acquires Additional Gas Wells, Acreage in Montana
Foothills Exploration, Inc., an independent oil and gas exploration company engaged in acquiring and developing oil and natural gas properties in the Rockies, has announced that it plans to acquire natural gas wells and acreage for production and development in Stillwater and Golden Valley counties, Montana. The transaction, which represents Foothills’ second acquisition in Montana, is expected to close in third-quarter 2019, subject to customary closing conditions, and governmental approvals.
On June 26, the Company entered into a letter agreement with an unrelated third-party to acquire approximately 5,769 acres and 12 shut-in natural gas wells. Additional assets consist of associated pipelines, gathering systems, compression and processing facilities, and related yards and equipment. The Company intends to bring online the 12 shut-in wells to generate revenue in the near term and increase reserves. The Company’s technical team will continue to assess the optimum in-field development program and advise on how to best exploit behind pipe potential.
Executive Chairman Kevin Sylla commented, “This strategic bolt-on acquisition is a great example of our strategy of targeting adjacent oil and gas properties to build a geographically-concentrated portfolio of producing or underdeveloped properties to grow scale and take advantage of optimization and operational efficiencies. This acquisition will complement a previously announced proposed acquisition under agreement, which is expected to close around the end of August, as the two target properties will have synergies from a gathering system connecting the two fields. Furthermore, both acquisitions are shallow gas properties with depths of less than 2,500 feet, with relatively low development costs, which will allows us to create value for our shareholders,” continued Sylla.
“Our technical and business development teams have been tasked with finding properties that fit our investment criteria in Montana – those with behind pipe potential, infield drilling opportunities, low operating costs, long lived reserves and upside development potential,” said Sylla.
The Company will continue to pursue natural gas weighted assets, as a principal investment theme. Foothills says it believes that the global demand for natural gas will out strip demand in the future, as more countries move away from coal for power generation.
The International Energy Agency projects that gas will surpass coal as the world’s second largest energy source by 2030. The U.S. Energy Information Administration predicts natural gas will account for nearly 39% of U.S. energy production by 2050. According McKinsey & Company’s Global Gas and LNG Outlook to 2015, Europe is expected to require approximately 45 billion additional cubic meters of gas imported over the next five years.
No assurances can be given that the Company will gain the necessary approvals, bonding and financing to complete this transaction.