By Oil & Gas Financial Journal staff

Denver-based Bill Barrett Corp. (NYSE: BBG) has signed a purchase and sale agreement with a Texas American Resources Co. affiliate to acquire Denver-Julesburg (DJ) Basin properties targeting Niobrara oil for $150 million.

The acquired properties are located within and near the Wattenberg Field and near the Hereford area, close to the Colorado-Wyoming border, and include a preliminary estimate of 7 million barrels of oil equivalent (MMboe) net proved reserves, roughly 650 boe/d net production and approximately 28,000 net acres of mineral leasehold, primarily on fee lands. Current production is predominantly from the Codell and Niobrara formations.

Fred Barrett, chairman, CEO and president of Bill Barrett said the acquisition builds on the company’s two year effort to build its DJ Niobrara oil position where the company now holds more than 67,000 net acres.

“With this acquisition, we have established a new, sizable DJ play that includes exploitation opportunity within the existing Wattenberg development area and a sizable exploration acreage position, where we intend to test the Niobrara through horizontal drilling this year,” said Barrett. 

The acquisition opportunity complements an existing position that increases the oil component in the company's portfolio, he continued. The company made a similar "bolt-on" acquisition of Uinta Basin oil assets for $120 million in May.

Capital expenditures for 2011 associated with DJ Basin acquisition, which is expected to close in the third quarter of 2011, are estimated to reach $35 million.