ZaZa Energy Corp. and Hess Corp. have ended a joint venture (JV) agreement they made in 2010 for activities in the Eagle Ford Shale in South Texas and the Paris Basin in France. ZaZa is taking over the Eagle Ford activities while Hess will hold the exploration licenses in France.

ZaZa net acreage holdings in the Eagle Ford will increase from 11,500 acres to 72,000 acres. The acreage includes 10,810 acres in the Moulton Prospect Area (Gonzalez, Fayette and Lavaca counties); 35,650 acres in the Sweet Home Prospect Area (DeWitt and Lavaca counties); 1,970 acres in the Cotulla Prospect Area in the southern region of Frio County; and 23,120 acres in the Hackberry Prospect Area (Lavaca and Colorado counties), all in the proved, productive regions of the Eagle Ford Trend, ZaZa said. ZaZa will provide Hess a 2% overriding royalty interest (ORRI) in the Moulton Prospect Area and a 1% ORRI in the Hackberry and Sweet Home Prospect Areas.

The company’s net oil sales in the Eagle Ford will decrease from 301 b/d to 281 b/d pro forma the agreement, and net natural gas sales will increase from 619 Mcf/d to 729 Mcf/d, the company said.

Hess paid $15 million up front and is to pay $70 million to ZaZa upon closing of the transaction.

“Upon closing the transaction, we will have created a critical mass of assets in the prolific Eagle Ford core and emerging Woodbine/Eaglebine plays, where we will be the operator of approximately 170,000 net acres,” said ZaZa CEO Craig McKenzie. “We will also retain our French base business and preserve access to upside from future exploration success associated with the one million acres targeting the Liassic resource.”

After closing, ZaZa’s portfolio will be about 72,000 net acres in the Eagle Ford core; 98,520 nearly contiguous net acres in the Woodbine/Eaglebine play in Grimes, Madison, and Walker counties; 24,260 wholly-owned acres of conventional producing assets in the Paris Basin; and a 5% ORRI in the Paris Basin exploration licenses.

ZaZa is operator on almost all of the portfolio acreage. Net total production from the conventional French assets is 850 b/d, with total proven plus possible reserves of approximately ten (10) million barrels of oil.

The company hired Jefferies to assist in securing a joint venture partner or partners for its Eagle Ford and Woodbine/Eaglebine assets, as well as to evaluate other strategic opportunities.