By OGJ editors
HOUSTON, Aug. 19 -- Abraxas Petroleum Corp., San Antonio, and Blue Stone Oil & Gas LLC, Denver, have formed a joint venture to develop Abraxas acreage in the Eagle Ford shale play of South Texas.
Abraxas will contribute 8,333 net acres to the joint venture in exchange for a $25 million equity interest, while Blue Stone will contribute $25 million for an equivalent stake. Blue Stone has committed to invest a further $50 million. At full funding, its interest will rise to 75%.
The venture will acquire additional 3D seismic data, expand the acreage position, and drill and complete wells in the Eagle Ford shale. Its target area covers 12 counties.
Abraxas President and Chief Executive Officer Bob Watson said he expects the venture’s funding to support drilling and completion of 10 wells, which his company will operate. Blue Stone will manage day-to-day business.