ZaZa Energy and Hess have agreed to end their joint venture agreement in the Eagle Ford Shale and the Paris Basin of France. ZaZa is taking control of the partnership’s Eagle Ford assets and Hess is taking control of exploration licenses in France. In terminating the agreement, Hess is paying $15 million upfront and will pay an additional $70 million when the transaction closes.
Both Hess and ZaZa are keeping overriding royalty interests in the assets forfeited.
After closing, ZaZa’s portfolio of assets will comprise approximately 72,000 net acres in the Eagle Ford core, 98,520 nearly contiguous net acres in the Woodbine/Eaglebine play in Grimes, Madison, and Walker Counties, approximately 24,260 wholly-owned acres of conventional producing assets in the Paris Basin, and a 5% ORRI in the Paris Basin exploration licenses. ZaZa is Operator on almost all of the portfolio acreage. Net total production from the conventional French assets is approximately 850 barrels of oil per day (“bopd”), with total 2P reserves of approximately ten (10) million barrels of oil. Net oil sales in the Eagle Ford will decrease from 301 bopd to 281 bopd pro forma the agreement, and net natural gas sales will increase from 619 thousand cubic feet of gas per day (“mcfd”) to 729 mcfd (all figures as at June 6, 2012). The Company’s pro forma total net sales will be 1,131 bopd and 729 mcfd.
ZaZa is now marketing its Eagle Ford and Eaglebine assets in hopes of securing another joint venture partner(s).
Read more at ZaZa.com.