Magnum Hunter Resources Corp. and privately held Eclipse Resources I LP have struck a joint operating agreement covering a leasehold owned by both companies in the Marcellus and Utica shales in Monroe County, OH.
Terms call for Magnum Hunter unit Triad Hunter LLC and State College, PA-based Eclipse to collaborate within the contract area on an equal basis on 1,950 net mineral acres with the objective of drilling 12 horizontal wells in the Marcellus and 12 horizontal wells in the Utica over the next three years, the partners said.
“Our geological interpretation of this area indicates the potential to yield not only high-volume wells in the Utica Shale, but it is also located within the liquids-rich regime of the Marcellus Shale where Triad Hunter has already drilled two successful Marcellus wells immediately adjacent to these properties,” said Triad Hunter President James W. Denny. “Due to the treacherous terrain in this region and the need to minimize our collective footprint, forming partnerships like this enables us to maximize drainage of our leasehold position.
“This joint venture allows Triad Hunter to continue its strategy of developing high-quality reserves, while providing our midstream affiliate, Eureka Hunter Pipeline, the opportunity to further expand its footprint into Ohio.”
It is estimated that the combined capital costs for the development will exceed $200 million. Triad Hunter has been designated operator and each company will own an approximate 47% working interest. The balance is owned by third parties. Eclipse has also agreed to commit its share of production to a new pipeline system currently under construction by Magnum Hunter’s Eureka Hunter Pipeline LLC.
Last October Triad Hunter agreed to buy all of privately held Viking International Resources Co. Inc. for $106.7 million, picking up 51,500 net Appalachian Basin mineral acres in West Virginia and Ohio (see Shale Daily, Oct. 26, 2012).
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