As per the terms of the agreement, USE will pay approximately $2.5m to earn the interest in approximately 6,200 net acres and to carry Cirque for a component of its drilling cost in a commitment well.
Cirque is the operator of the project and the commitment well is planned to be spud in the fourth quarter of 2010.
All subsequent wells will be drilled on a heads-up basis and the prospect is a Miocene target in the San Joaquin basin with an expected total drilling depth of approximately 13,000ft.
The well is targeting up to 300ft of layered Stevens Sands in a stratigraphic trap on the flank of a oil producing field in the basin.
Additional seismic analysis may be applied to further delineate the overall prospect and prospective drilling program, based on the results of the well.
The company said that geologic evaluation and current spacing suggest potential for numerous drilling locations.
