EP Energy Corp. (NYSE: EPE) said in regulatory filings that it modified its drilling joint venture (JV) to focus on the Eagle Ford instead of the Permian Basin.
The JV, formed in January 2017 with a subsidiary of Apollo Global Management LLC, was originally intended to drill up to 150 Wolfcamp wells.
As part of the previous agreement, Apollo would foot 60% of drilling, completion and equipping bills with $450 million in capital. In exchange, its subsidiary Wolfcamp Drillco Operating LP would earn working interest in the wells, which will be drilled in two 75-well tranches in Reagan and Crockett counties, Texas.
However, on April 27, EP Energy and Apollo amended the JV agreement to direct the development area for the second tranche from the Permian to the Eagle Ford, according to regulatory filings with U.S. Securities and Exchange Commission.
The new second tranche development will be developed pursuant to two phases with the initial phase consisting of 34 Eagle Ford wells. Apollo's share of drilling, completion and equipping costs associated with the second tranche development will not exceed $225 million.
EP Energy expects that the second tranche phase one will be completed in 2019, following which the company will then propose a second phase of the second tranche development.
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