Encore Acquisition Inks JDA with ExxonMobil in West Texas
Encore Acquisition has executed a joint development agreement with ExxonMobil to further develop seven natural gas fields in West Texas.
ExxonMobil offers a portfolio of producing natural gas properties in West Texas, and Encore brings horizontal drilling expertise to renew these properties, states Encore. The JDA covers certain formations in the Parks, Pegasus, and Wilshire Fields in Midland and Upton counties; the Brown Bassett Field in Terrell County; and the Block 16, Coyanosa, and Waha Fields in Ward, Pecos, and Reeves counties. Targeted formations include the Barnett, Devonian, Ellenberger, Mississippian, Montoya, Silurian, Strawn, and Wolfcamp horizons.
Under the terms of the agreement, Encore will have the opportunity to earn 30 percent of ExxonMobil's working interest in each well drilled. Encore will operate each well during the drilling and completion phase, after which ExxonMobil will assume operational control of the well.
After Encore has fulfilled its obligations under the 24-well commitment phase, Encore will be entitled to a 30-percent working interest in future drilling locations. Encore will have the right to propose and drill wells for as long as Encore is engaged in continuous drilling operations.
"We are excited that ExxonMobil has selected Encore as a development partner to enhance such significant, high-potential natural gas fields in West Texas," stated Jon S. Brumley, Encore's president and CO. "We see great potential in the fields and are looking forward to working with ExxonMobil to bring these development ideas online."
In 2006, Encore intends to drill 22 wells and invest $17 million
of net capital in the joint venture. Encore anticipates operating four rigs in West Texas by the end of 2006. "To have the opportunity to invest in an opportunity of this size is a significant step for
Encore," Brumley stated. "We have enjoyed working with the ExxonMobil
team in evaluating and negotiating this opportunity."
Operates 13 Offshore Rigs
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Company: Encore Acquisition Company more info
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