The Houston Exploration Co. said Tuesday it has entered into a joint venture agreement with Enduring Resources LLC in Utah's Uinta Basin. Under the terms of the agreement, each company will contribute 40,000 acres, and in turn, earn a 50% working interest in all contiguous 80,000 acres.
Houston Exploration said its activity in the area is expected to increase from one rig to three rigs by year's end. Enduring Resources will pay the next $19 million of capital required net to Houston Exploration, which is funding for approximately 30 gross wells. After those capital obligations have been met, all required expenses will be shared equally.
Houston Exploration's net acreage position in the Uinta Basin remains at 94,000 acres, and the gross position is now 150,000 acres. In addition, the company will retain a 100% working interest in the wells already drilled in the most prolific area found to date by the company.
"An agreement structured in this manner is win-win for both organizations, allowing each of us to maximize potential while minimizing risk," said Houston Exploration Co. CEO William G. Hargett. "With additional technology and expertise, over the next 18 months we should be able to accelerate our drilling program and build an efficient gas gathering infrastructure that will optimize the production from the field."
The Houston-based company's operations are focused in South Texas, the Arkoma Basin, the Rocky Mountains and offshore in the shallow waters of the Gulf of Mexico. Additional production is located in East Texas.
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