Abraxas-Blue Stone JV Takes Bigger Bite of Eagle Ford Shale
Abraxas signed a joint venture agreement with Blue Stone O&G to develop the Eagle Ford Shale play in South Texas.
Abraxas will contribute 8,333 net acres in the Eagle Ford Shale play to Blue Eagle Energy, LLC (the "JV") and receive a $25 million equity interest in the JV and Blue Stone will initially contribute $25 million in cash to the JV for a $25 million equity interest in the JV. In addition, Blue Stone has committed an additional $50 million in cash to the JV, which combined with the initial $25 million, will be used to acquire additional acreage and 3-D seismic data, and to drill and complete wells targeting the Eagle Ford Shale formation. Upon full funding, Abraxas will own a 25% equity interest in the JV and Blue Stone will own a 75% equity interest in the JV.
The JV's subject area will encompass 12 counties across the Eagle Ford Shale play for expected future acreage acquisitions. Abraxas will operate the wells in the JV and Blue Stone will manage the day-to-day business affairs of the JV.
"We are very excited about partnering with Blue Stone as the joint venture will greatly accelerate our activity in the Eagle Ford Shale play, well above what we could have accomplished on our own. We are pleased that Blue Stone shares our confidence in the development potential of our acreage position which is located in all three hydrocarbon windows of the play. In addition to acquiring additional acreage and 3-D seismic data, we anticipate that the committed capital will allow the JV to drill and complete approximately 10 wells," commented Bob Watson, Abraxas' President and CEO.
Kyle R. Miller, Blue Stone's President, further commented, "We are delighted to partner with an experienced South Texas operator with a core acreage position in the Eagle Ford Shale play and look forward to expanding our position and developing the play."
Rivington Capital Advisors, LLC, and its affiliate, Rivington Securities, LLC, acted as exclusive financial advisor to Blue Stone.
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