Bayswater Exploration and Production LLC is partnering with YTEF Drilling LLC to share costs in up to 63 horizontal oil and gas wells the Wattenberg field in Colorado’s Denver-Julesburg (DJ) Basin.
Under terms of the joint venture (JV), YTEF agreed to fund an undivided portion of the wells in Bayswater’s Wattenberg acreage. The wells would be on six well pads in the basin’s oil window, the companies said on Monday.
YTEF is a private investment fund led by York Capital Management in partnership with Millennial Energy Partners (MEP).
“The partnership with Bayswater represents YTEF’s inaugural investment in the DJ Basin, which we believe offers some of the most compelling and repeatable drilling opportunities in the U.S.,” said MEP’s Drew Scoggins, managing partner.
“The joint development agreement with YTEF allows us to efficiently maximize our capital deployment and continue to aggressively develop our core Wattenberg holdings,” added Bayswater CEO Steve Struna.
Drilling and completing the wells would be done through 2020, with YTEF expecting to fund up to $125 million of capital expenditures.
The JV announcement follows the signing into law this year of Colorado’s state Senate Bill 181, which tightened environmental restrictions on oil and gas activity, and gave city and county governments more leeway to regulate the industry as they see fit.
PDC Energy Inc. warned in November that the law could lead to “significant delays” in permitting and other necessary approvals for developing the Wattenberg field.