Shale Daily / NGI All News Access

JV Opportunities Available in East Texas

Cabot Oil & Gas Corp. is seeking a joint venture (JV) partner to develop its Haynesville and Mid-Bossier Shale leasehold in San Augustine, Nacogdoches and Sabine counties in East Texas. And East Texas Oil & Gas LLC (ETOG) is offering an East Texas JV opportunity in Leon, Madison, Brazos and Robertson counties.

BMO Capital Markets is adviser on both offerings.

"Cabot will consider a range of potential JV structures; however, their preference is to divest 33% interest in current production and undeveloped leasehold for a combination of upfront cash and a capital expenditure carry on future new drills," BMO said. "Cabot would retain operatorship and conduct an agreed to drilling program."

The company has "significant U.S. shale play experience (Haynesville, Marcellus and Eagle Ford)," BMO said. There have been "highly successful well tests and production from both the Haynesville and Mid-Bossier shales within and immediately offsetting Cabot's position."

ETOG's leasehold position is being offered to industry partners in two packages: deep gas (Knowles Lime, Deep Bossier and Cotton Valley Lime) and shallow oil (Woodbine, Eagle Ford, Buda/Georgetown).

"This is a unique JV opportunity with a seasoned E&P management team, and operatorship is available with the exception of portions of the shallow oil package within Brazos County," BMO said.

BMO said ETOG will consider a range of potential JV structures, including assignment of operatorship. However, its preference is a 50% working interest partner in a "cash plus carry" based arrangement. The drill-to-earn structure would include an upfront payment to ETOG and a minimum 25% carried working interest in six obligation wells to be drilled in each package in order to earn a 50% working interest. "The objective is an alignment of each partner's interests and a focus to grow the value of their respective interests," BMO said.

For info on the offerings contact Miles Redfield, BMO managing director, at (713) 546-9715, or miles.redfield@bmo.com.

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