Chevron USA Inc. and Cimarex Energy Co. have merged acreage held by both the West Texas Delaware basin for an 8-year joint development program to be operated by Cimarex.
The agreement covers 104,000 acres of liquids-rich unconventional portfolio in Culberson County, Tex.
Chevron said its Mid-Continent business unit based in Houston will obtain infrastructure including a gathering system, roads, and utilities.
Alan Kleier, vice-president of the business unit, said, “Our complementary acreage positions in West Texas and New Mexico, along with our common development outlook, make Chevron and Cimarex natural partners, and the large contiguous lease position will enable the optimum development of these resources.”
Tom Jorden, Cimarex chief executive officer, said, “Collaborative development of this ‘checkerboard’ acreage ownership makes perfect sense. Optimal well placement for both Second Bone Spring wells and longer-lateral Wolfcamp shale tests can now be achieved.”
Chevron will contribute acreage and pay Cimarex $60 million for the 50% interest in the Cimarex-built Triple Crown gas gathering and processing system and wells drilled on the acreage in 2013.
Chevron said its land position exceeds 1 million gross acres in the Delaware basin, which contains several stacked oil and wet gas plays.