Shell enters into development agreement with Quicksilver
September 27, 2012
“This alliance with Shell in the Sand Wash Basin is a validation of Quicksilver’s efforts over the past two years to unlock significant oil reserves in the Niobrara shale formation. We will now combine our resources to push a much larger project forward.”
— Toby Darden, chairman of Quicksilver Resources, Inc.
Quicksilver Resources, Inc. announced Monday it has entered into an agreement with Shell Western Exploration and Production, LP — a subsidiary of Royal Dutch Shell, plc.
Quicksilver and SWEPI are exploring the viability of the Niobrara formation and have each drilled exploratory wells in Moffat and Routt counties.
The agreement outlines a joint venture to develop oil and natural gas interests in Sand Wash Basin in northwest Moffat County and establishes an Area of Mutual Interest encompassing more than 850,000 acres in the basin.
"This alliance with Shell in the Sand Wash Basin is a validation of Quicksilver's efforts over the past two years to unlock significant oil reserves in the Niobrara shale formation," said Quicksilver chairman Toby Darden in a news release. "We will now combine our resources to push a much larger project forward."
According to the agreement, Quicksilver and Shell will each sign to the other a 50 percent working interest in the majority of their respective acreage in Sand Wash Basin, which totals about 330,000 acres.
Each party also has the right to a 50 percent interest in any future acquisitions within the 850,000 acre AMI.
Should Quicksilver contribute more acreage, Shell also will be required to pay an equalization of 50 percent on the land differential, the release states.
Quicksilver will continue to operate its wells drilled prior to the agreement. Shell will operate a majority of lands outlined in the agreement.
Closing is expected to occur before the end of the year.
Joe Moylan can be reached at 875-1794 or firstname.lastname@example.org.