Rosetta Resources Inc, the oil and natural gas producer, would be investing in Comstock Resources Inc's acreage located in West Texas Permian Basin. The value of the purchase is US$768 million and this is to reduce its dependence in the Eagle Ford shale location in Texas
Rosetta share values increased by 6% to US$53.13 last Friday while Comstock shares jumped by 18% to share values of US$18.86 after Comstock announced the purchase proceeds would help in its debt reduction. Other Permian Basin acreage owners such as Clayton Williams Energy Inc, Concho Resources Inc and Cimarex Energy Corp had their share values also increase with the Rosetta announcement.
The acquisition by Rosetta is at 53,306 net acres, doubling its acreage. The new sites would mean lessening demand from the 96% production taken from the Eagle Ford shale properties.
According to James Craddock, Rosetta CEO, "It is a continuation of our strategy to pursue new growth opportunities and build our inventory of repeatable oil rich products."
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