Baytex Energy Corp. (BTE, BTE.TO) Tuesday said its U.S. subsidiary has agreed to sell the non-operated interests in Williston Basin oil and gas properties in North Dakota to Bakken Hunter LLC, a unit of Magnum Hunter Resources Corp. (MHR), for $311 million in cash.
Baytex said the sale represents 45 percent of its North Dakota net acreage and about 40 percent of its current U.S. Production. The assets include about 950 barrels of oil equivalent per day (boe/d) of Bakken oil production and 149,700 gross acres of land. As of December 31, 2011, the assets were estimated to have proved reserves of 12.4 million boe.
The deal will reduce Baytex's 2012 production by 500 boe/d. The company now anticipates its production for the year in a range of 53,500 to 54,500 boe/d, down from 54,000 to 55,000 boe/d. Meanwhile, the company's exploration and development capital budget for the year remains at C$400 million.
Baytex will use the proceeds to pay debts or redeploy into other oil and gas assets. The deal is expected to close on or about May 22, 2012.
In a separate statement, Magnum Hunter said the acquisition would increase its total Williston Basin position to over 125,000 net acres.
Magnum Hunter anticipates raising its upstream capital budget program to about $225 million from $150 million, with nearly $50 million in additional capital spending expected for the acquired assets.
Magnum Hunter also said that an additional $50 million will be allocated to Eagle Ford region's capital budget, while Appalachia region's capital spending will be reduced by $25 million.
BTE is currently trading at $49.50, down $0.22 or 0.44% on the NYSE. On the Toronto Stock Exchange, BTE is trading at C$49.08, down C$0.16 or 0.32%.
MHR is currently trading at $5.84, down $0.34 or 5.47%, on a volume of 1.8 million shares.
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