Quicksilver Resources Inc., Fort Worth, and Eni SPA will jointly explore for oil on 52,500 gross acres held by Quicksilver in the Delaware basin of West Texas.
Eni will pay up to $52 million representing 100% of seismic, drilling, and completion costs to earn a 50% interest in Quicksilver’s Leon Valley acreage. Eni’s investment will occur in three phases.
The first phase covers the drilling and completion of as many as three wells to commence by June 2014. The agreement also provides that, upon funding of the first phase, Eni will earn 50% of Quicksilver’s interest in a 7,500 gross acre tract also in the Leon Valley area.
Eni will then have the option to fund the drilling and completion of two more wells and commit to a 3D seismic survey in order to fully earn a 50% interest in Quicksilver’s Pecos County acreage. Following Eni’s $52 million investment, the parties will share equally in all future revenue, operating costs, and capital outlays.
Members of each company will form a joint evaluation team to conduct exploration and development activities, with Quicksilver designated as operator.
The two companies have also formed an area of mutual interest covering Pecos and Reeves counties to pursue more opportunities in the basin.
Quicksilver noted that Eni has helped the Fort Worth firm improve gas recovery in the Alliance area of its Barnett shale development.