Plains Exploration & Production Co. signed an agreement to acquire from Houston American Energy Corp. its holdings in Karnes County, Tex. Houston American will retain an overriding royalty interest in the assets. The planned purchase are part of Plains' announced $578 million acquisition of interests in about 60,000 net acres in the Eagle Ford oil and gas condensate windows in South Texas.
Houston American will sell to Plains its 2.5% working interest in more than 6,000 gross acres in Karnes County for about $1.65 million cash, less customary closing costs. As part of the transaction, Houston American will retain a 1.25% of 8/8's overriding royalty interest (ORRI) in this acreage. In addition, Houston American will retain its 1.25% ORRI on any additional acreage Plains acquires within the Prospect Area (about 50,000 gross acres in Karnes County) up until Apr. 2, 2012.
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