Anadarko Petroleum has agreed to buy Houston-based Howell Corp. for about $200 million.
In return, Anadarko will obtain Howell's 98% ownership of the Salt Creek Field, which held an estimated 1.7 billion barrels of crude.
Anadarko will also get Howell's Elk Basin Field, a smaller property north of Cody.
Anadarko plans to invest nearly as much as it paid for the acquisition to increase Salt Creek's production to 35,000 barrels per day from 5,300 barrels per day by the end of 2006.
The recovery effort is to add 150 million barrels of reserves from Salt Creek alone.
Proven reserves of both fields will yield about 50 million barrels of oil equivalent. The last barrels will be pushed out of the field using a carbon dioxide flood. This recovery project will cost Anadarko $200 as it will require to drill more wells, install lines carrying carbon dioxide and build facilities to gather and treat natural gas.
Howell's stock price jumped $6.98 to $20.53, while Anadarko's declined 45 cents to $44.54.