Sovereign, Underground Form JV

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
0MM
Description

Formation of a JV to develop Zaca Field In Santa Barbara County, Calif.

Underground Energy Corp. (Toronto Venture: UGE) plans to form a joint venture with Sovereign Resources LLC to develop acreage in the Zaca Field in Santa Barbara County, Calif.

Under the terms of the agreement between the two companies, Sovereign will have up to a 75% working interest in Underground’s interest in 2,857 gross acres in the northwest corner of the Zaca Field extension project. Underground Energy owns 80% of the leasehold interest in the joint venture lands and a total 10,482 net acres across the Zaca Field.

Sovereign will drill a maximum of seven wells to earn its full working interest. Underground and its minority partners will be carried for the first two wells, and will have the right to fund their portion of any subsequent wells. Underground said it anticipates drilling to begin within six months.

Sovereign Resources is a privately-held upstream oil and gas company based in Dallas, Texas. Underground Energy is based in Santa Barbara, Calif.