Mike little Joe,
I Think Ris is riding PNEG which they own a nice chunk of.
This was just released on PNEG very good news and explains the recent rise in both companies this last week
Darko:-)
Pennaco Energy and CMS Oil and Gas Company Announce Joint Venture In Powder River Basin Coal Bed Methane Play
DENVER, Oct. 26 /PRNewswire/ -- Pennaco Energy, Inc. (OTC Bulletin Board: PNEG - news) and CMS Energy Corporation's (NYSE: CMS - news) exploration and production unit, CMS Oil and Gas Company, today announced they have signed a definitive agreement to form a joint venture in the Powder River Basin coal bed methane play in northeastern Wyoming and southeastern Montana. The agreement involves virtually all of Pennaco's approximate 492,000 net acre leasehold position, the largest single leasehold position in the play. CMS Oil and Gas Company will acquire an undivided 50% working interest in Pennaco's position in the Powder River Basin for $28.0 million, payable at two closings.
The joint venture will involve the development of the acreage for coal bed methane as well as provide for gathering, compression and transportation of the methane gas produced by the two companies in the Basin. Pennaco and CMS will split operations on a 50/50 basis while CMS Energy's pipeline unit, CMS Gas Transmission and Storage, will provide gathering, compression and transportation services to the joint venture. Essentially all of the joint venture's leasehold is dedicated to CMS Gas Transmission and Storage for gathering, compression and transportation.
Paul M. Rady, Pennaco President and CEO, stated that ''This transaction with CMS strategically aligns Pennaco with an outstanding oil and gas producer as well as an outstanding gatherer, transporter and marketer, which will allow Pennaco and CMS to initiate an aggressive development program on the Joint Venture's large Powder River Basin acreage position. We also believe that CMS Gas Transmission and Storage has the expertise, operating capability and the balance sheet strength to expand pipeline capacity both within the Powder River Basin and downstream into the interstate markets. We are delighted to join forces with such a high quality company as CMS Energy to develop this extremely high potential resource base.''
Glen C. Warren, Jr., Pennaco Executive Vice President and CFO stated that ''The CMS transaction will result in a very strong balance sheet for Pennaco, which will provide the Company with the financial flexibility to initiate an aggressive drilling program in the Powder River Basin as well as to take advantage of other growth opportunities as they arise.''
Hanifen Imhoff, Inc. provided an opinion to the Board of Pennaco that based on the factors set forth in such opinion, that the proposed transaction is in the best interest of Pennaco and its shareholders from a financial point of view.
Pennaco is a recently formed Exploration and Production company headquartered in Denver, Colorado, whose primary asset is its 492,000 net acre leasehold position in the Powder River Basin of northeastern Wyoming and southeastern Montana.
Bradley W. Fischer, President and CEO of CMS Oil and Gas, stated that ''The transaction with Pennaco has key roles for a number of CMS Energy businesses including exploration and production, gas transmission and gas marketing. As such it is an important part of the company's strategy to participate in business opportunities with value-enhancing synergies.''
CMS Energy Corporation is a $5 billion (sales), $10 billion (assets) international energy company operating throughout the U.S. and in 21 countries around the world with businesses in electric and natural gas utility operations; independent power production; natural gas pipelines and storage; oil and gas exploration and production; and energy marketing, services and trading. CMS Energy Corporation's principal subsidiary is Consumers Energy, Michigan's largest utility and America's fourth largest combination gas and electric utility.
This release contains forward-looking statements regarding future plans and expected performance based on assumptions believed to be reasonable. A number of risks and uncertainties could cause actual results to differ materially from these statements, including, without limitation, fluctuations in the price of crude oil and natural gas, the success rate of exploration efforts and the timeliness of development activities, as well as other risk factors described from time to time in the Company's documents and Offering Memorandums.
SOURCE: Pennaco Energy, Inc.
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