Our operations in the Raton Basin of northern New Mexico and southern Colorado, where we own the minerals beneath the Vermejo Park Ranch, are primarily focused on coal bed methane production. As of December 31, 2011, these operations included 606,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 81 MMcfe/d.
We have a non-operated working interest in the County Line coal bed methane property in Wyoming,
Our Arklatex land positions comprise 104,470 total net acres focused on tight gas sands production. We have approximately 449,000 net acres in our unconventional plays. Our production is from vertical CBM wells development in Alabama, vertical and horizontal CBM wells in the Hartshorne coals in Oklahoma and the New Albany Shale in Indiana (sold in July 2012). We have high average working interests and long life reserves in these areas. For the six months ended June 30, 2012 we had average daily production of 119 MMcfe/d. "
Yes, I figured as much on the Black Warrior Basin, but wasn't as sure on the Raton. I don't really like this deal. It is very heavy on the PDP, which does allow them to keep expanding the revolver, but this is just typical arbitrage. It doesn't even look to be terribly accretive..but the SG&A, LOE costs are very low and with the hedges they can layer on at these prices, it does add to the distribution, gives them a much larger base to spread out their overhead etc.
Still, I'd have preferred to see something smaller and easier to digest, less PDP..