PetroQuest Energy Inc. (NYSE: PQ) said Nov. 10 that it entered joint venture (JV) agreements with a group of investors (partners) to develop the Cotton Valley Formation in East Texas.

The partners acquired about 20% working interest in PetroQuest’s 6,400-gross acre project area. The JV excludes existing vertical and horizontal producing wells within that area.

During the first phase of the JV, 47 horizontal wells will be drilled with expected average lateral length of about 5,600 feet.

PetroQuest recently executed a rig contract and expects to spud the first well in December of 2016.

PetroQuest expects to pay about 69% of the drilling and completion costs for a 75% working interest in the initial well. During 2017, eight to 10 gross wells are expected to be completed under the JV.

The partners will pay about $12 million in participation fees over the first 12 months of the program, subject to a one-time partner election to continue participating in the program after the seventh well. The fees will fund a portion of PetroQuest’s development costs.

The partners will also pay about 24% of the drilling and completion costs relative to their 20% working interest. PetroQuest said it is evaluating interest from other potential partners.

PetroQuest Energy Inc. is based in Lafayette, La.