07-06-01 Wolverine Gas & Oil and Shell have linked up on a joint natgas exploration venture in south-western Wyoming. The move comes in the wake of Shell's failure to acquire independent coal bed methane producer Barrett Resources.
Under the provisions of the joint venture, Shell purchased a 70 % interest in Wolverine's 120,000-acre leasehold in the Pacific Creek area in Wyoming for an undisclosed amount. Grand Rapids, Michigan-based Wolverine will retain the remaining 30 %, and the two companies will work together on exploration decisions, said Wolverine President Sid Jansma Jr.
Shell is not purchasing Wolverine, Jansma said. Instead, the 53-year-old company will remain privately held and family owned. Wolverine also has other oil and gas acreage in Wyoming and other western states, and is partnering with Phillips Petroleum on a separate project in a different geographic location, he said.
"This is a different strategy than Barrett," Jansma said. "Shell was looking for a whole company in the Rocky Mountains to buy." The joint venture with Wolverine is not a replacement for the Barrett deal, said Shell onshore public affairs manager Ron Hansen. Several years ago, Shell established two separate but parallel work groups to obtaining natural gas onshore in the Rocky Mountains. The first group, acquisitions, is the team that identified Barrett, Hansen said.

A parallel group has been aggressively targeting onshore deals for grassroots exploration, and the Wolverine joint venture is the result of their work, Hansen said. "These are two separate paths. Sometimes you have to drill for success. Sometimes you have to buy for success," Hansen said.
The two companies are seeking conventional gas, not coal bed methane, in a deep-gas play similar to the Jonah gas field in Wyoming. The wells will be drilled to about 13,500-feet deep.
Most of Wolverine's leases in the Pacific Creek area are on federal lands, and the company has applied with the US Department of Interior's Bureau of Land Management for drilling perm its for six exploratory wells.