Magnum Hunter Resources Corporation announced the formation of a new Joint Venture under a Joint Operating Agreement with EM Energy Ohio, LLC, a privately-held company headquartered in Canonsburg, Pennsylvania. The contract area covers an existing mineral leasehold position currently owned by both companies which includes collectively approximately 1,080 net acres in the Marcellus Shale and Utica Shale Formations located in Washington County, Ohio.
Terms of the new Agreement include Magnum Hunter's wholly-owned subsidiary, Triad Hunter, LLC ("Triad Hunter") and EdgeMarc, collectively working together within the contract area on two units in Washington County, Ohio, the Merlin Pad and the Haynes Pad.
The Merlin Pad includes approximately 620 mineral acres (approximately 14% working interest to Triad Hunter and 86% working interest EdgeMarc) located in central Washington County, Ohio. Magnum Hunter and EdgeMarc have recently commenced drilling an initial Utica Shale well on this pad, where we will obtain critical reservoir information to help optimize infill development and completion design.
Later this year, we will spud the Haynes Pad; which includes approximately 460 mineral acres (approximately 89% working interest to Triad Hunter; 11% working interest to EdgeMarc) in an area where both the Marcellus and Utica shales should be productive. Magnum Hunter and EdgeMarc plan to initially drill one Marcellus and one Utica Shale well on this pad later this year; again taking critical reservoir information that will enable us to optimize our infill development plans.
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "This will be the third joint venture we have entered into in this region. The first two were with Stone Energy and Eclipse Energy under similar arrangements in Wetzel County, West Virginia and Monroe County, Ohio, respectively. By forming these joint units, we more efficiently exploit the leasehold which allows for longer laterals to be drilled in both the Marcellus and Utica formations. This benefits the working interest owners and mineral interest owners alike. It also reduces overall costs by strategically locating the drilling pad in a manner that is most efficient for development due to the treacherous terrain typical in this area. We hope to form additional joint development units as we further exploit this resource rich area where we typically have two high quality formations stacked on top of one another."