Saka purchased 36% full participating interest in the properties from Swift for $175 million in total cash consideration, with $125 million to be paid at closing. The remaining $50 million in cash was to be paid by Saka over time to carry a portion of Swift’s field development costs incurred after the Jan. 1 effective date.
Swift at closing received $147 million consisting of the initial $125 million cash consideration plus Saka’s share of capital costs. Saka expects to fulfill the remainder of the drilling carry obligation in 2016.
“This arrangement marks the beginning of a strategic partnership to grow production in the Eagle Ford dry-gas window of South Texas,” said Terry Swift, Swift chief executive officer.
Swift will use the proceeds to reduce the amount of borrowings under the company’s credit facility and fund accelerated development of the company’s Eagle Ford properties.