By the OGJ Online Staff
HOUSTON, Sept. 7 -- EEX Corp., Houston, said Thursday it sold its 27.5% interest in Llano field (Garden Banks Blocks 385 and 386) to Amerada Hess Corp. effective June 1.
Amerada Hess will pay $50 million plus an overriding royalty interest of 0.05% for the first 100 million boe of production and 1% thereafter. It also will reimburse EEX for the costs of drilling the current Llano 4 well.
EEX will retain its interests in, and remain operator of, Garden Banks blocks 344, 387, 388 and 345, which contain the Jason discovery and five prospects. These blocks are part of a federal unit that includes the Llano Field and the blocks to be sold.
Tom Hamilton, EEX chairman, president, and CEO, said, "The sale of our nonoperated interest in Llano field will allow us to concentrate on appraising our Jason discovery and other prospects in the Llano complex where we are in a better position to control the pace of activity.
"We believe that the Llano complex is one large field comprised of several fault blocks with substantial hydrocarbon potential. Our working interests in these remaining fault blocks, our royalty in Llano field, and other possible future developments represent opportunities for EEX to increase production."
Amerada Hess estimated Llano has gross proved and probable reserves of 125 million boe. The company operates production of more than 130,000 boe/d from four fields in the Garden Banks area.
First production from Llano, 20 miles southwest of the Amerada Hess operated Baldpate compliant tower production facility, would come 18 months after project sanction, which is expected in 2002.
