Southwestern Energy Co., Fayetteville, Ark., and Energen Resources Corp., Birmingham, Ala., have formed an exploration alliance in the southeastern New Mexico portion of the Permian basin.
Under the deal, the companies jointly will explore Energen's 14,200 net acres in Lea and Eddy counties. The companies plan to drill two exploratory wells this year, with Southwestern as operator.
Southwestern will pay the cost of the initial drilling program and will retain a majority working interest. The two companies also will acquire 3D seismic data on a selective basis.
The deal covers an 18-month initial period that expires July 1, 2002, with an additional continuous development phase afterwards.
Harold Korell, Southwestern president and CEO, said: "We are working hard to continue our growth in the Permian, and this agreement strengthens the efforts of both companies in this area. Our activity in the Permian keeps building from the foothold that we established there 3 years ago."
James McManus, president and CEO of Energen, said, "This exploration agreement supports Energen Resources' continued success in the Permian basin and complements our existing exploitation strength."