ZaZa Energy Corporation announced that it has signed a Joint Exploration and Development Agreement with one of the largest independent crude oil and natural gas companies in the United States to further develop ZaZa's Eaglebine assets.
Under the terms of the Agreement, ZaZa's joint venture partner will receive up to a 75 percent working interest in up to 55,000 net acres and operate the JV acreage comprising 73,000 of ZaZa's 92,000 net mineral acres. ZaZa will retain a 25 percent working interest in the 73,000 acres. These assets include certain lands located in Walker, Grimes, and Madison, Trinity and Montgomery Counties, Texas, which are wholly owned by ZaZa, and also incorporate certain properties that are covered within the Participation Agreement with Range Texas Production, LLC, a wholly-owned subsidiary of Range Resources Corporation.
Early-stage drilling preparations are already underway for the first two JV wells and the Company expects that the joint venture partner will have drilled the first three earning wells by January 2014.
According to Todd A. Brooks, ZaZa's president and CEO, "Partnering with one of the largest unconventional oil focused operators in the country validates the Eaglebine work program that has been executed by ZaZa to date. Our new joint venture will benefit from economies of scale and focus on optimizing field development and accelerating production at a reduced cost."
The development program consists of three phases, each covering a three well drilling program plus associated cash payments. Phases two and three are electable by our partner upon satisfaction of the preceding phase's work obligations.
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