Vancouver-based Terrace Energy Corp. has reached an agreement to acquire and develop acreage in Zavalla and Dimmit counties in South Texas in an area that has seen "highly successful" discovery wells in the emerging Buda Limestone formation. Terrace struck a farm-in agreement for a 75% working interest (WI) in several leases that cover 10,000 gross (6,700 net) acres. The company has the opportunity to drill a series of earning wells to test the Buda formation. Each well will secure a 75% WI and a 56.25% net revenue interest in a 640 acre production unit. The company has the option to secure additional production units by drilling additional earning wells each within 120 days from the completion date of the previous earning well. Each production unit may contain up to seven additional drilling locations. The project acreage is in the core of the Eagle Ford trend and is near a number of prolific horizontal wells drilled into the naturally fractured Buda Limestone, Terrace said. "We believe the Buda Limestone formation, which is also present on our Maverick County Project, is highly prospective and will be a core focus for our company as we implement our growth model in South Texas," said CEO Dave Gibbs.
Oklahoma City-based American Energy-Woodford LLC (AEW), an affiliate of American Energy Partners LP (AEP), has raised $500 million in equity commitments and secured $180 million in bank borrowings to acquire assets in the Woodford Shale/Mississippi Lime combination play in central and northern Oklahoma, an area that AEW has named the CNOW play. AEW's exclusive private equity investor is The Energy & Minerals Group; additional equity commitments have been provided by AEW management and others. Financing proceeds will initially be used to acquire approximately 120,000 net acres of leasehold and approximately 6,000 net boe of daily production in the CNOW play with the goal of establishing a leasehold position of up to 200,000 net acres over time. AEW is acquiring the assets from Calyx Energy LLC; Calyx Energy II LLC; Liberty Energy LLC; and Truevine Operating LLC. AEP was founded by former Chesapeake Energy Corp. CEO Aubrey McClendon (see Shale Daily,Jan. 29).