Under the agreement, CRMI will fund 100% of the drilling and completion costs of up to $475,000 per well whereas additional drilling and completion expenses for each well will be split 60% to TransCoastal and 40% to CRMI.
Once completion, each company own 50% working interest in each well while the net revenue interest will be divided as 42.6% to CRMI and 28.4% to TransCoastal until each well’s drilling and completion costs are paid back.
Each party will then have a 35.5% net revenue interest in each well.
TransCoastal’s subsidiary CoreTerra Operating will be the official operator of each well.
TransCoastal CEO Stuart Hagler said: "These first 10 joint venture wells are just the beginning of an aggressive development program of approximately 100 drill site locations in our proved-undeveloped reserve category."
"This JV compliments TransCoastal’s acquisition strategy of acquiring and developing long-lived reserves, which remain largely undeveloped."
