The wells to be drilled are from Evolution’s portfolio of proved and probable locations and target the naturally fractured Austin Chalk and Georgetown formations in Burleson and Grimes counties in central Texas.
Evolution will operate the wells through the drilling and completion phases and will participate for a 20% working interest before payout and 38% working interest after payout. The company expects to pay a 10% working interest share of the costs associated with drilling and completing the wells in which it participates within the JV.
The additional 10% before payout working interest and 28% after payout working interest represent Evolution’s contribution of leases to the JV. Drilling operations are expected to begin within 60 days and to be completed by early spring 2011. Evolution’s capital contribution will be funded from current working capital and expected operating cash flows as part of its fiscal 2011 plan.
