By OGJ editors
HOUSTON, Aug. 24 -- Enerplus Resources Fund entered into a joint development agreement for work in the Marcellus shale with two private companies, both based in Texas.
Chief Oil & Gas LLC, Dallas, and Tug Hill Inc., Fort Worth, agreed to sell 30% interest of their Marcellus shale assets for $406 million, of which $162.4 million is due at closing and $243.6 million is to be paid as a carry of 50% of Chief's future drilling and completion costs.
Chief will continue to operate the properties in which Enerplus acquires interest. The deal is expected to close by Sept. 15 with an effective date of May 1.
Together, Chief Oil & Gas and Tug Hill own leasehold interest in 552,000 gross acres in the Marcellus shale, primarily in Pennsylvania. Chief has drilled 31 Marcellus shale wells—10 vertical and 21 horizontal.
Enerplus also entered a long-term agreement with Chief Gathering LLC, an affiliate of Chief Oil & Gas, for the gathering, dehydration, and compression of Enerplus’s share of production.
In addition, Chief Oil & Gas and Tug Hill agreed to an area of mutual interest with Enerplus that will allow for the pursuit of additional acreage in the Marcellus play.