* Buys assets in Utah from Harvest Natural, private co
* Deal expected to close in Q2; adds 70,000 net acres
* Harvest Natural shares up 8 pct; Newfield stock up 2.5 pct
(Recasts; adds details, analyst comments)
By Krishna N Das
BANGALORE, March 22 Oil and natural gas producer
Newfield Exploration will raise its acreage in the
oil-heavy Uinta basin of Utah by more than a third by buying
assets of Harvest Natural Resources and an unnamed
private company for about $308 million.
Encouraged by crude oil prices that are consistently trading
above $100 a barrel, global exploration and production companies
have been on the hunt for deals in shale formations across the
Houston-based Newfield plans to spend nearly all of its 2011
budget of $1.7 billion to develop its oil and liquids-rich gas
The Uinta deal adds 70,000 net acres to Newfield's nearly
183,000 in the basin. The bought acreage is largely undeveloped
and is located near the company's largest oil asset, the
Monument Butte field.
Wells Fargo Securities analyst David Tameron said, "(It)
makes sense for Newfield to extend its position at one of its
highest rate of return assets."
Analysts at Wells Fargo, Tudor Pickering Holt, Global Hunter
Securities and Raymond James pegged the per-acre price at about
This compares with about $13,000-$16,000 per acre that Korea
National Oil will pay Anadarko Petroleum for a stake in
the U.S. company's properties in the Eagle Ford Shale -- another
Newfield said last month it expects the Monument Butte field
to grow more than 15 percent this year and domestic oil volumes
to rise by about half.
"The acreage value is likely a positive read through for
Bill Barrett and Berry Petroleum's Uinta oil
projects. The companies are targeting the same oil-producing
formations directly west of Newfield acquired acreage ..."
The deal, likely to close in May, will be financed through
Newfield's revolving credit facility.
Separately, Harvest Natural said the sale of all of its oil
and gas assets in the Uinta Basin will fetch it $215 million in
cash. The sale, effective March 1, consists of nearly 47,600 net
The sale of Harvest Natural's 70 percent working interest in
the Uinta properties is a part of the Venezuela-focused firm's
strategic alternatives process. It plans to use
the proceeds to repay debt.
"Proceeds from the transaction will allow Harvest Natural to
pay down debt as well as complete its drilling programs in both
Indonesia and Gabon while allowing the company to continue to
evaluate strategic alternatives," said Michael Bodino, analyst
at Global Hunter Securities.
Bank of America Merrill Lynch advised Houston-based Harvest
Natural on the deal.
Harvest Natural shares rose 8 percent at $15.11. Newfield
shares, which closed up 4 percent on Monday following the
Anadarko deal, were up 2.5 percent at $77.13 on Tuesday on the
New York Stock Exchange.
(Reporting by Krishna N Das; Editing by Unnikrishnan Nair,