The Board of Austin Exploration Limited announced signing of an agreement with Houston-based Halc?n Resources Corporation for further drilling in the Eagle Ford shale at the Company’s Birch Project in Burleson County, Texas.
Under the farm-out agreement, Halcon will earn a 70% interest in the Birch Project by funding 100%of the
drilling costs on the next three Eagle Ford wells.The total estimated cost for the three horizontal wells is
projected to be USD 24$ - 27$ million (8- 9 million per well). The three well farm-out agreement covers
approximately , acres.
The capital, production and profit for all wells drilled after the three aforementioned wells will be shared on a
% (Halc5n)/30% (Austin) basis.
Austin will also receive a $1.9 million upfront payment for an 18 month exclusive drilling option during which
time the farm-out wells must be drilled. Also included in the sale is a 70% interest in Austin’s B1 Krueger and B3
Schwartz Galbreath wells and associated acreage. Due-diligence for the purchase of these wells is expected to
be completed in August 2013.
Austin Exploration Chairman, Richard Cottee, commented, “This is a major vote of confidence in Austin’s Eagle
Ford acreage and in our team’s ability to identify high potential assets in key oil regions. Halc?n is a proven
operator with significant knowledge and expertise specific to the Eagle Ford shale formation.
“The financial benefit to Austin from the Birch farm-out is hugely significant. First, we continue to share the
benefits of developing a world class Eagle Ford shale asset; second, Austin can concentrate our efforts on
developing our, much larger prospect, in the Niobrara which is already well-advanced and has proven
commercial hydrocarbons”, Mr Cottee said.
For more information about related Opportunities and Key Players visit Oil Shale Projects