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CASPER, Wyo. -- A New York City-based firm says it will acquire Andarko's Atlantic Rim natural gas project in the Washakie Basin in south-central Wyoming.

Warren Resources Inc. says it will pay up to $21 million for the project, which would include Anadarko Petroleum Corp.'s 51,247 acres of leases, and Anadarko's interest in the gas gathering, compression and other pipeline assets.

Warren already controls half the interest in the pipeline assets and is already active in the Washakie Basin.

"The Atlantic Rim acquisition provides us with immediate and significant increases in production and proved reserves at a very competitive price," said Espy Price, Warren Resources chairman and chief executive, in a news release.

Price also noted the acquisition would expand the company's position in coalbed methane assets and prospective deep formations, including the Niobrara formation. Warren announced plans last year to drill an exploratory well into the Niobrara. The purchase includes Andarko's assets in the Spyglass Hill and Cataline units.

The company decided to exercise its option to purchase Anadarko's interests after Anadarko said it intended to sell the assets to a third party.

A spokeswoman for the Woodlands, Texas-based Anadarko refused to disclose the identity of the third party to the Star-Tribune.

Warren Resources said it plans to close on the purchase of the assets by Sept. 27.

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Warren Resources is primarily focused on the Wilmington's field in California and in Wyoming, but also owns natural gas and oil interests in Texas, New Mexico and North Dakota.

Warren Resources is one of three operators -- along with Anadarko Exploration Corp. and Double Eagle Petroleum and Mining Inc. -- active in the Atlantic Rim area and seeking to expand natural gas development there.

The companies' most recent project -- approved by federal regulators in 2007 -- would include up to 1,800 coalbed methane wells and 200 conventional gas wells, and was expected to yield 1.35 trillion cubic feet of gas.

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