Voyager has signed an exploration and development agreement with Slawson Exploration to develop Slawson's 48,000 net acres in the Denver-Julesberg Basin Niobrara Formation in Weld County, Colorado in close proximity to several high-rate producers.
Slawson will commence the continuous drilling program in early July 2010 with an initial series of three test wells expected to be completed by October 2010. Subject to the results of these wells, Slawson expects to commence a continuous drilling program targeting 57 additional locations in the prospect that will be drilled throughout 2011.
Voyager purchased a 50% working interest in the approximately 48,000 acre block for $7.5 million and will participate on a heads-up basis on all wells drilled, as well as participate for its proportionate working interest in all additional acreage acquired in an Area of Mutual Interest consisting of all of Weld and Laramie Counties. Voyager will fund the purchase price and initial drilling commitments out of cash on hand and cash flows from current production. Voyager remains fully funded through 2010 with no debt and approximately $12.5 million of cash on hand.
J.R. Reger, CEO of Voyager O&G, commented, "We are very excited to be working with Slawson in the D-J Basin. Slawson's rich history of success in the Rockies, its reputation for drilling efficient and effective wells, and its excellent geoscience department make them an ideal partner to explore this exciting play. We believe this joint venture gives Voyager the ability to vastly increase our net well position in an emerging oil resource play with an excellent cost of entry and a top-level operator. We believe this asset complements our other positions in the Williston Basin and allows us to continue to leverage our low cost structure and competitive leasing advantage into yet another exciting oil play."
According to state records, EOG Resources' Jake well, a horizontal Niobrara discovery in Colorado's Weld County in close proximity to the Voyager acreage, flowed an average 1,750 barrels of oil and 360,000 cubic feet of gas per day for its first eight days on production in October 2009. The Jake produced more than 50,000 barrels of oil in its first 90 days.
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