Tom Brown, Inc. Acquires Spirit Energy 76's Rocky Mountain Oil and Gas Assets

Tom Brown, Inc. has completed the acquisition of most of the Rocky Mountain oil and gas assets of Spirit Energy 76, a lower 48 exploration and production unit of Unocal Corporation. This acquisition includes the Lisbon Plant, a sophisticated cryogenic natural gas processing plant, and approximately 65,000 net undeveloped acres. The net proved reserves of the acquired properties are estimated to be 89 billion cubic feet equivalent of gas as of the acquisition effective date.

Key Takeaways:

• The acquisition consideration included 5.8 million shares of Tom Brown, Inc. common stock and $5 million for the properties.
• The effective date of the transaction was January 1, 1999, resulting in a net cash payment to Tom Brown, Inc. reflecting the net operating results of the Unocal properties.
• The Lisbon Plant is a modern sophisticated cryogenic (60 million cubic feet per day capacity) natural gas processing plant that extracts natural gas liquids and merchantable helium.
• The average net sales from the Unocal properties in 1998 was approximately 18 million cubic feet per day of natural gas, 290 barrels of oil per day, and 92,000 gallons of gas plant liquids per day.
• The net proved reserves of the Unocal properties are estimated to be 89 billion cubic feet equivalent of gas as of the acquisition effective date.
• Approximately 65,000 net undeveloped acres were acquired.
• Tom Brown, Inc. has made forward-looking statements regarding the acquisition, including statements on commodity prices, environmental risks, and operating risks.

Statistics:

• $5 million: the cash payment for the properties
• 5.8 million: the number of shares of Tom Brown, Inc. common stock given in consideration
• 60 million: the capacity of the Lisbon Plant in cubic feet of natural gas per day
• 18 million: the average net sales of natural gas per day in 1998
• 290: the average barrels of oil per day in 1998
• 92,000: the average gallons of gas plant liquids per day in 1998
• 89 billion: the estimated net proved reserves of the Unocal properties as of the acquisition effective date
• 65,000: the number of net undeveloped acres acquired
• 1998: the year in which the average net sales of the Unocal properties were recorded
• 1999: the year in which the effective date of the transaction was (January 1)

Sources:

• "Tom Brown, Inc. Closes Acquisition of Spirit Energy 76 Assets" by PRNewswire, July 6.