British Gas will make its first move into U.S. exploration in joint ventures with units of Broken Hill Pty. Ltd. of Australia and ARCO in the Gulf of Mexico and Gulf Coast.
Letters of intent cover joint exploration onshore and offshore Texas with BHP Petroleum (Americas) Inc. and exploration and development onshore and offshore Louisiana and Alabama with ARCO.
British Gas said it picked BHP and ARCO as partners because of their established acreage positions and record of exploration success in areas of interest to the company.
The combined exploratory program, targeting large gas prospects, is likely to involve drilling about 20 wildcats throughout the Gulf Coast area.
That includes 10 wells covered by the BG-BHP agreement, which calls for spending of more than $50 million.
BG also will participate in development of ARCO operated Miocene gas fields off Alabama (OGJ, Mar. 6,1989, p. 17).
Consideration was not disclosed.
BG Exploration America Inc., a subsidiary with headquarters in Houston, will manage British Gas's interest in the ventures.
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