Under the terms of the Agreement, Noble Energy will earn a 75% working interest in Teton's approximately 182,000 acres by (1) paying Teton $3 million dollars and (2) drilling and completing 20 wells at no cost to Teton. At closing, Noble Energy paid Teton the balance of the $3 million as called for in the Agreement. The Parties anticipate that the 20 wells will be drilled and completed by the first quarter of 2007. During that time, Teton will receive 25% of any revenues derived from the first 20 wells. After completion of the first 20 wells, Teton and Noble Energy will split all costs associated with future drilling according to each party's working interest percentage.
Drilling depth on a Niobrara well is approximately 2,000 feet. Drilling and completion costs for a Niobrara well are approximately $150,000 per well.
Noble Energy is currently evaluating the acreage and developing drilling plans.
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