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OUR VISION:
TO BE THE
BEST
ENERGY COMPANY
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Energy Corporation of America Enters into Agreement
to Sell a Term Royalty Interest to Black Stone Minerals Company,
L.P.
DENVER, May 18, 2005 – Energy Corporation of America (ECA) announced
today that it has entered into an agreement to sell a Term Royalty
Interest in certain natural gas producing properties to Black
Stone Minerals Company, L.P. (Black Stone) and certain of its
affiliates including Black Stone Acquisitions Partners II, L.P..
On April 5, 2005, ECA created Appalachian Gas Royalty Trust
and filed an S-1 Registration Statement with the SEC. Black
Stone, one of the largest private fee mineral and royalty owners
in the U.S., entered into negotiations with ECA and agreed to
purchase the assets for $155 million acquiring a 90 percent
royalty interest in 312 producing gas wells located in the Appalachian
Basin in West Virginia, Pennsylvania and Kentucky. Black Stone
will also acquire a 50 percent royalty interest in 180 development
wells to be drilled by ECA in Kentucky and West Virginia. ECA
will drill the development wells by March 31, 2008. The estimated
proved reserves in the Term Royalty Interest are 45 BCF. The
Term Royalty Interest has an effective date of January 1, 2005
and will extend for 20 years at which time the Term Royalty
will revert to ECA.
“We are very pleased to be partners with a company with the
proven expertise of Black Stone, and committed to making this
a win/win transaction” said John Mork, CEO of Energy Corporation
of America. “The proceeds from this sale will allow ECA to repay
outstanding debts and invest in future exploration, development
and production.”
"This acquisition is a major step forward for Black Stone,"
said Thomas L. Carter, Jr., president of Black Stone. "We
like the properties, which have historically had stable production
profiles and productive lives in excess of 25 years. The properties
compliment our existing portfolio of assets and are consistent
with the business model that we have established that is intended
to earn our investors and limited partners superior returns.”
ECA is a privately held energy company engaged in the exploration,
development, production, gathering, aggregation and sale of
natural gas and oil, primarily in the Appalachian Basin and
Gulf Coast region in the United States and in New Zealand. ECA
owns and operates over 5,000 gas and oil wells in the United
States. Raymond James acted as ECA’s financial advisor for the
development of the Trust and the sale of the Term Royalty Interest.
Black Stone is one of the largest privately owned mineral companies
in the United States. Along with its limited partners and other
investors, Black Stone now owns interests in approximately 13
million gross mineral and royalty acres in virtually every significant
onshore exploration basin in the lower 48 states, with interests
in approximately 15,000 wells producing in excess of 3.1 million
barrels of oil equivalent per year. Randall & Dewey, A division
of Jefferies & Company Inc., acted as advisor to Black Stone
on this transaction.
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