Austin Exploration Ltd. (ASX: AKK.AX) formed a joint venture (JV) with Pierre Energy Partners to develop its Pierre Shale prospects in in Colorado, Austin said March 23.
Australia-based Austin is operator of an 11,560-acre Pathfinder oil and gas property in Fremont County, and it agreed to have Pierre drill two wells back-to-back in April and May. Pierre Energy will carry the drilling costs to earn 50% of the oil production from the C18#3 and C18#4 exploration wells. Austin will pay for the wells’ completion costs if there is a discovery.
Craig Energy, based in Denver, will provide drilling services for the JV, Austin said.
Guy Goudy, COO of Austin, said the agreement allows continued development of the property without upfront cost for the company.
The two companies are in advanced negotiations for a long-term partnership to continuously drill the property. Pierre would drill 10 wells in exchange for a 50% ownership of the formation. Pierre would earn the ownership after completing the last well, and until then, would earn half of Austin’s net revenue interest for each wellbore.
Pierre LLC will then drill two wells per year, minimum, and Austin will complete them for production cash flow.
Mark Hart, managing director and CEO of Austin, said the partnership means production will ramp up when oil prices return to normal.
Drilling results will be sent to the market when they become available.
Recommended Reading
Enterprise’s SPOT Deepwater Port Struggles for Customers
2024-04-25 - Years of regulatory delays, a loss of commercial backers and slowing U.S. shale production has Enterprise Products Partners’ Sea Port Oil Terminal and rival projects without secured customers, energy industry executives say.
Enterprise Gains Deepwater Port License for SPOT Offshore Texas
2024-04-09 - Enterprise Products Partners’ Sea Port Oil Terminal is located approximately 30 nautical miles off Brazoria County, Texas, in 115 ft of water and is capable of loading 2 MMbbl/d of crude oil.
Enbridge Fortifies Dominant Role in Corpus Christi Crude Transport
2024-03-20 - Colin Gruending, Enbridge executive vice president and president for liquids pipelines told Hart Energy the company’s holdings in South Texas are akin to a “catcher’s mitt” for Permian and Haynesville production.
Enbridge Announces $500MM Investment in Gulf Coast Facilities
2024-03-06 - Enbridge’s 2024 budget will go primarily towards crude export and storage, advancing plans that see continued growth in power generated by natural gas.
For Sale? Trans Mountain Pipeline Tentatively on the Market
2024-04-22 - Politics and tariffs may delay ownership transfer of the Trans Mountain Pipeline, which the Canadian government spent CA$34 billion to build.