Aug 06 - Black Hills Corporation Completes Colorado Oil and Gas Acquisition

Source Press Release
Company Black Hills CorpKoch Industries 
Tags Deals, Upstream Activities
Date August 30, 2006

Black Hills Corporation (NYSE: BKH) today announced the completion of the acquisition of additional ownership interests and leasehold in the Piceance Basin of Colorado. The purchase price for the transactions was approximately $24.1 million.

The Company recently completed its acquisition from a third party of most of the remaining working interests associated with the property acquired in March 2006 from Koch Exploration Company. The acquisition included approximately 22.4 billion cubic feet equivalent (Bcfe) of proven reserves, of which 17.9 Bcfe are proved undeveloped reserves. Current annual net production from the assets is slightly less than 0.5 Bcfe.

As part of the transaction, the Company also acquired rights to more than 15,000 net acres of undeveloped leasehold adjacent or near existing operations in the Piceance Basin of Colorado. The Company's leasehold position in the Piceance Basin totals approximately 73,000 net acres.

David R. Emery, Chairman and CEO of Black Hills Corporation, said, "In 2006, we have acquired about
62 billion cubic feet of natural gas reserves and 46,000 net acres of leasehold in Colorado, much of which is undeveloped. The most recent acquisition permits us to further consolidate our exploration and production activity in the Piceance Basin," Emery continued. "The expansion and concentration of assets is expected to improve our operating efficiency and management of capital deployment. We continue to make progress on planning a multi-year drilling and development program. Currently, we are focusing on recompletions and reworks of existing wells to boost near-term production and expect to commence drilling new wells next year."

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