Austin Exploration Limited has agreed with a major US Oil and Gas company (Farm-in Partner') to fund a three well farm-in at Austin's 100% owned Birch Prospect in Burleson County Texas.

The two companies expect to finalise documentation by June 30, at which time the Farm-in Partner will be announced.

Under the agreement the Farm-in Partner will fund 100% of the costs on the next three Eagle Ford wells that it drills and will earn a 70% interest in the Birch Project in return. The estimated well costs of the three horizontal wells are projected to be USD $24mil ($8 mil per well).

The three well farm-out agreement covers approximately 4295 acres with Austin retaining 100% of a 645 parcel of acreage.

From well number 4 onwards the capital, production and profit will be shared on a 70% (Farm-in Partner) and 30% (Austin) basis.

Tags: Austin Exploration Limited