By OGJ editors
HOUSTON, Mar. 21 -- Anadarko Petroleum Corp. and a subsidiary of Korea National Oil Corp. agreed to form a joint venture in the liquids-rich Eagle Ford shale.
KNOC will invest $1.55 billion in the form of a carry for about one-third of Anadarko's Maverick basin assets in South Texas.
The carry will finance 100% of Anadarko’s 2011 post-closing capital costs in the basin and up to 90% of the costs after that until the carry is exhausted, expected by yearend 2013.
National oil companies, international oil companies, and others are investing in US shale gas plays in an accelerating trend (OGJ, Feb. 28, 2011, p. 18).
Anadarko President and Chief Operating Officer Al Walker said the transaction involves acreage in the play’s higher-margin condensate window.
KNOC also will reimburse Anadarko for net cash outflows, relative to acquired interest, subsequent to the effective date of Jan. 1, 2011. These costs are expected to be $50 million.
In exchange, KNOC will receive 80,000 net acres in the Eagle Ford and 16,000 additional prospective net acres for the deeper dry-gas Pearsall shale and Pearsall opportunities underlying the Eagle Ford acreage
KNOC may also elect, no later than 30 days post-closing, to participate as a partner with a 25% working interest in associated gathering systems and facilities.
Anadarko plans to boost the number of rigs working in the Eagle Ford shale to 10 from 9 early in the second quarter.