Eclipse Resources Corp. (NYSE: ECR) said on Dec. 27 it entered into definitive agreements with Sequel Energy Group LLC to establish a drilling joint venture (JV) on the company’s Utica Shale acreage in Guernsey and Monroe counties in southeast Ohio.
The JV encompasses funding from Sequel of up to $285 million to fund its proportionate share of two drilling programs comprising 34 gross wells in aggregate, commencing with wells currently in progress and extending through wells expected to be commenced through the end 2018.
The JV includes a mutual option for an additional third well program consisting of approximately 16 wells, which would increase the committed funding.
Eclipse Resources will act as the operator of all wells drilled within each well program.
Eclipse Resources will retain 50% of its pre-carry working interest in the first program and will have the option until January 31, 2018 to adjust its pre-carry working interest in the second program and, if applicable, the third well program to between 30% and 70% until such program is commenced.
The JV also includes a 15% carried interest on drilling and completion capex incurred in each well program, proportionately reduced to Eclipse retained pre-carry working interest.