12th Nov 2014 11:07
LONDON (Alliance News) - Caza Oil & Gas Inc on Wednesday said it has struck a deal to buy prospective Bone Spring and Wolfcamp acreage in the southern Delaware Basin in the US which extends into Texas.
Under the deal, Caza has entered into a farm out and exploration agreement with US oil firm Clayton Williams Energy Inc to jointly develop the latter's Reeves County property.
Caza will provide 75% of the costs attributable for drilling, completing and equipping the initial well on the site through production facilities in order to earn a 50% working interest and the right to participate in the balance of the farmout area.
Beyond the initial well, Caza will be obligated to drill and complete two additional wells at Wolfcamp in order to continue the agreement, or will have to pay a USD1.6 million fee for each well not drilled.
"We are very pleased to announce this sizeable transaction with Clayton. This is an excellent opportunity for Caza to substantially grow its asset base in the Delaware Basin's exciting Bone Spring/Wolfcamp Play with a company that has a proven track record in the basin," said Caza Chief Executive W Michael Ford.
Shares in Caza were down 1.8% to 14 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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