Craton Energy Corp. has retained Meagher Energy Advisors to sell a 25% net participating interest in its operated Cotton Valley leasehold in East Texas.
The package includes three-year, paid-up leases in approximately 7,500 net acres, in an acreage position comprising 14 proposed units, in 10,000 gross acres in Rusk and Smith counties. Leasing is ongoing in the area. Proved, probable and possible reserves are estimated at 448 billion cubic feet of gas.
The participation agreement allows for the reimbursement of sunk costs and includes promoted drilling and completion costs for the field's initial 14 wells and promoted costs of initial facilities and gathering lines, with a heads up on remaining wells.
Craton is targeting Taylor and upper and middle Cotton Valley sands on the properties, with secondary objective for Travis Peak and Pettet formations. The operator's development plan calls for 233 drill sites on a 40-acre development pattern, with up to 233 additional locations on a 20-acre infill pattern, with potential for horizontal drilling. Craton anticipates building field-wide gas-lift and water-disposal infrastructure.
Additionally, the field is on trend between Overton and Oak Hill Fields and on strike with the western flank of the Sabine uplift. Three existing wells ranging from 9,400 feet to 11,500 feet in depth confirm the structural and stratigraphic concepts.
The bid due date is July 28. The effective date is June 1. The deal is expected to close by Aug. 30.
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