PostRock Energy Corp. (NASDAQ: PSTR) said on June 12 that it entered into a joint venture (JV) with Silver Creek Oil & Gas LLC covering about 17,900 gross acres in the Woodford Shale.
The JV will enable initial horizontal test wells to be drilled in Cleveland and Pottawatomie counties, Okla., the company said. This area includes part of the leasehold that PostRock acquired in late 2013, PostRock added. The first two horizontal wells, both targeting the shale, should be drilled and completed by year-end, the company noted.
The Oklahoma City-based PostRock will swap about 3,800 total net acres in 28 sections with the Irving, Texas-based Silver Creek. The ownership split in the development area will be 30% PostRock and 70% Silver Creek, PostRock said, noting that Silver Creek will be the operator.
PostRock will gain 16 additional sections in its leasehold interest, the company said. PostRock will sell about 1,150 net acres to Silver Creek for $466,000 in cash, the company added.
Silver Creek has drilled more than 50 horizontal wells in southeast and south-central Oklahoma, the company said.
"We are very pleased to enter into this agreement which will allow us to begin testing the Woodford on the leasehold we have acquired at an accelerated pace, while limiting risk and capital," Terry W. Carter, PostRock’s CEO, said.
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