Rango Energy, INNEX Form JV To Develop California, Oklahoma Leases

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Description

To form a JV to develop projects; Some include existing partnerships with major independents.

Rango Energy Inc. (OTC: RAGO) announced Jan. 17 that it has formed a joint venture (JV) with INNEX California Inc., of Dallas, to develop projects in California and Oklahoma; some include existing partnerships with major independents.

Rango, based in Dallas, signed a definitive JV, operating and acquisition agreement with INNEX for oil and gas leases covering about 40,000 gross acres in the San Joaquin, Ventura, and Eel River Basins in California and an additional project in Oklahoma. Projects include JVs with Occidental Petroleum Corp. (NYSE: OXY) and Hess Corp. (NYSE: HES).

INNEX is the originator of most of these ongoing projects and has retained from 10% to 100% ownership. All projects have significant oil, condensate, and gas potential.

Highlights:

  • Joint development of 10,000 acres of the Kreyenhagen formation in San Joaquin Valley with partners including Occidental Petroleum;
  • Joint development of 35,000 acres of the San Joaquin Basin with Hess; and
  • Joint development of 2,300 acres with PUD and potential gas reserves in the South Goodwin Field in Oklahoma with partners Mewbourne Oil Co. and Chesapeake Energy Corp. (NYSE: CHK).

Rango will have the right to fund and earn a full 50% working interest in nearly all of the entire INNEX oil and gas portfolio. Rango will fund each well at 100% of the costs submitted by INNEX or to INNEX by its partners and will receive 75% of cash flows from each well up and until they recoup 125% of the cost, at which time cash flow will revert to 50%. After three wells are drilled at each specific target zone, Rango and Innex will go heads up on all future drilling.

In the first two years of the agreement, Rango will have the ability to acquire 100% of INNEX, terms dependent on the results of the initial work program.