Bill Barrett to sell $335M worth of gas assets
DENVER -- Bill Barrett Corp. said Thursday that it plans to sell some of its natural gas properties to Vanguard Natural Resources LLC for $335 million, part of the oil and gas company's strategy to sell off "lower-growth" assets it doesn't consider central to its business.
Natural gas prices hit a 10-year low earlier this year. They have rebounded somewhat since then, and many energy companies have slowed gas production in favor of oil drilling.
Late Wednesday, while reporting third-quarter results, Bill Barrett said that it intended to ramp up its oil drilling and acquisitions. It posted a loss of $52.6 million, or $1.11 per share, for the quarter. Excluding one-time items, the loss came to 20 cents, on revenue of $180.9 million. Analysts expected better results.
In afternoon trading, Bill Barrett shares dropped $2.34, or 10 percent, to $20.57. Shares of Vanguard, which is based in Houston, rose 10 cents to $29.82.
Bill Barrett, which is based in Denver, is selling properties that contain 239 billion of cubic feet equivalent of total proved reserves and 50 million cubic feet of gas equivalent per day of projected 2013 production.
The deal is expected to close by the end of the year.
Bill Barrett said it plans to use proceeds from the sale to reduce debt and fund investments.