Quicksilver Resources Inc. has entered into an agreement with Eni whereby Quicksilver and Eni will jointly evaluate, explore and develop approximately 52,500 gross acres in the Delaware Basin currently held by Quicksilver in the Leon Valley area located in Pecos County, Texas.
Under the terms of the agreement:
◾ Eni will pay up to $52 million representing 100% of drilling, completion and seismic costs to earn a 50% interest in Quicksilver's Pecos County acreage.
◾ The investment by Eni will occur in three phases with the first phase covering the drilling and completion of up to three wells to commence by June of 2014. The agreement also provides that, upon funding of the first phase, Eni will earn 50% of Quicksilver's interest in a 7,500 gross-acre tract also located in the Leon Valley area.
◾ Eni will then have the option to fund the drilling and completion of two additional wells and commit to a 3-D seismic survey in order to fully earn a 50% interest in Quicksilver's Pecos County acreage.
◾ Following Eni's $52 million investment, the parties will share equally in all future revenue, operating costs and capital expenditures.
◾ A joint evaluation team will be formed from members of each company to conduct exploration and development activities, with Quicksilver designated as operator.
◾ The two companies have also formed an Area of Mutual Interest covering Pecos and Reeves counties to pursue additional opportunities in the basin.