CAPCO and Hoactzin acquired rights to 11 producing wells and approximately 13,300 gross acres of land in South Chandeleur Area in the Gulf of Mexico and Louisiana State Waters from Manti Operating Company. The joint venture's working interests in the wells vary from 14% to 100%, with current net production of approximately 13 million cubic feet of gas per day.
The $20.0 Million purchase price for the Louisiana properties was funded by both Hoactzin and CAPCO, and by cash flow credited from production of the acquired properties. CAPCO also contributed to the joint venture arrangement its interests in High Island Block 196 and certain other oil and gas producing properties in exchange for the reduction of approximately $6.4 million of indebtedness to Hoactzin. Under their joint venture arrangement, Hoactzin will own and retain all cash flow from the properties until their investment is returned, and thereafter CAPCO will receive a 66.7% economic interest in the properties. CAPCO will also retain an option to repurchase the properties to be determined by a formula.
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