Core Resource Management, Inc. has entered into a joint venture agreement with TransCoastal to drill up to 10 wells on acreage owned by TransCoastal in the Texas Panhandle near Pampa, Texas.
The agreement stipulates that CRMI will fund 100% of the drilling and completion costs of up to $475,000 per well. Any additional drilling and completion expenses for each well will be split 60% to TransCoastal and 40% to CRMI.
Upon completion of each well, CRMI will receive 60% of the net revenues allocable to the well and Transcoastal will receive 40% until CRMI receives a return of its investment in the well, and thereafter each party will receive 50% of the net revenue in each well. CoreTerra Operating, a subsidiary of TransCoastal, has entered into a contract with the joint venture to be the official operator of each well drilled by the venture.