Texas American Resources Co. affiliate TARH E&P Holdings LP completed a farmout on a portion of its Eagle Ford Shale and Buda acreage in South Texas.
The transaction will allow the company to develop a portion of its lease acreage that was otherwise subject to continual drilling obligations or primary lease term expirations, it said. If all options in the farmout agreements are exercised, TARH would farm out 50% of its interest in about 6,075 leasehold acres prospective for the Eagle Ford and Buda formations.
"Texas American is excited about moving forward on our two-pronged oil-prone strategy in the Eagle Ford and Buda formations," said CEO David Honeycutt. "The farmout will allow us to derisk all of our acreage in LaSalle and Frio counties through drilling carry while continuing to retain operatorship and 50% ownership. This was our goal from the start since we are a long-standing operator in the area."
All of the consideration in the transaction is in the form of a drilling carry, which will fund the majority of the company's 2011 South Texas capital expenditure budget, it said.