BHP Billiton Pulls Out Of 51,720-Acre Delaware Basin JV With Energen

Cancels option to purchase 50% undivided interest in 51,720 net acres in TX Delaware Basin.

Energen Corp., Birmingham, Ala., (NYSE: EGN) reports BHP Billiton, Melbourne, Australia, (NYSE: BHP) will not exercise its option to purchase a 50% undivided interest in 51,720 net acres in the Delaware Basin under lease to Energen Resources Corp.

The determination came after the companies were unable to agree on terms for modifying the agreement.

In February, BHP Billiton purchased from Energen Resources three wells drilled in Reeves County, Texas, for approximately $18 million and agreed to carry the Permian Basin driller in the horizontal completion of two of the wells. BHP Billiton earned a 50% undivided interest in 4,829 net acres associated with the three purchased wells after beginning completion of two of them.

Because of this deal, BHP Billiton had the option to purchase a 50% undivided interest in 51,720 net acres in Reeves County on or before May 1, potentially raising its holdings to 50% of 56,549 net acres.