Vintage Petroleum Completes Purchase of 100 Percent of Argentine Concession

Article excerpt

TULSA (JR) -- Vintage Petroleum announced Wednesday it has acquired 100 percent of the El Huemul exploitation and exploration concession located in the San Jorge basin within the province of Santa Cruz, Argentina through two separate transactions from Total and Repsol S.A.

On July 1, Tulsa-based Vintage closed the previously announced purchase of Total's 70 percent interest in the El Huemul concession and Wednesday Vintage acquired the remaining 30 percent interest from Repsol.

Aggregate net daily sales volumes from the El Huemul concession are currently 9,400 barrels of oil and 19 million cubic feet of gas or a combined total of 12,565 barrels of oil equivalent.

The realized oil price for the production, net of transportation and selling expenses, recently averaged approximately $3.30 per barrel below the Nymex price, while the average gas price is approximately $1 per thousand cubic feet.

With these two transactions, Vintage owns a 100 percent working interest in the 150,000 acre concession adjacent to its existing 13 operated concessions in the basin bringing its total gross acreage to 1.16 million. This acquisition adds significantly to Vintage's existing core area of oil and gas operations in the San Jorge basin.

Aggregating the two transactions, the company has purchased 100 percent of the working interest in the concession for a total sum of $121.9 million in cash, $103 million was paid at closing and the remaining $18.9 million is payable at year-end 1999.

Vintage recently sold 9 million common shares at a price of $9.50 per share in an underwritten public offering. Net proceeds from the offering of approximately $81.2 million were used to finance a portion of the cost of the acquisitions. The purchase price in excess of the net proceeds raised in the offering is anticipated to be funded from cash flow and advances under the company's revolving credit facility. …