Crimson to acquire South Texas assets

Crimson Exploration Inc. has entered into a Purchase and Sale Agreement with a private company to acquire interests in four producing gas fields and undeveloped acreage in South Texas for $65 million in cash, subject to adjustment at closing for normal operations activity subsequent to the January 1, 2008 effective date and other customary purchase price adjustments. The transaction is expected to close on or around May 30, 2008. The total cash consideration due at closing will be funded with borrowings under the Company’s senior revolving credit facility. The Company currently has approximately $120 million of availability under that facility to fund at closing.

The assets being acquired consist of a 25% non-operated working interest in Samano Field located in Starr and Hidalgo counties, a 100% operated working interest in North Bob West Field in Zapata County and 100% operated working interests in Brushy Creek and Hope fields in DeWitt County. Crimson will be acquiring an interest in over 16,000 gross acres with these fields, most of which is held by production. This acquisition will further enhance the Company’s growing presence in the South Texas area.

Samano Field (5,600 gross acres) expands our commitment to the Vicksburg trend and complements our Cage Ranch Field assets in Brooks County. Both the operator of this field and Crimson have identified numerous exploitation opportunities in the Samano field including the possibility of downspacing to 20 acre units. According to the operator of Samano Field, drilling operations could begin as early as the summer of 2008 and could include as many as 6 gross wells in 2008.

Source : www.crimsonexploration.com/