Silver Creek Oil & Gas LLC, Irving, Tex., and PostRock Energy Corp., Oklahoma City, have formed a joint venture covering 17,900 gross acres in the Woodford shale area of Cleveland and Pottawatomie counties in central Oklahoma.
The JV includes an acre-for-acre swap between the companies involving 3,800 total net acres in 28 sections. The ownership split in the development area will be Silver Creek at 70% and PostRock at 30%. Silver Creek will serve as operator.
The JV, which will facilitate drilling of the initial Woodford horizontal tests in the area, includes a portion of the leasehold PostRock acquired in late 2013 (OGJ Online, Oct. 15, 2013). The first two horizontal wells, both targeting the Woodford, are expected to be drilled and completed by yearend.
The trade broadens the PostRock’s leasehold interest to an additional 16 sections. The company says covered acreage may increase through acquisition after poolings are completed. In connection with the JV, PostRock is selling 1,150 net acres to Silver Creek for $466,000 in cash.