Penn Virginia Corporation announced that it has completed an agreement with an undisclosed major oil and gas company to jointly explore the Eagle Ford Shale in Lavaca County, Texas. The agreement establishes an area of mutual interest (AMI) between PVA, as operator, and the other company covering approximately 13,000 gross acres near PVA’s existing acreage in southeastern Gonzales County. Depending on the future participation of other companies, PVA’s minimum working interest in this project will be approximately 50 percent. Preliminarily, PVA estimates that a minimum of approximately 40 horizontal drilling locations may exist in the new AMI area, with the potential for additional locations assuming future downspaced drilling.
Under the terms of the agreement, PVA will drill up to six wells by September 1, 2012 to earn its interest through the base of the Eagle Ford Shale in all of the 13,000 gross acres. PVA will carry the other company on its working interests in the first three wells.
H. Baird Whitehead, President and Chief Executive Officer stated, “We are pleased to have entered into this agreement in Lavaca County and believe the AMI acreage is highly prospective for the Eagle Ford Shale as it is situated almost adjacent to our existing Eagle Ford position in Gonzales County on which we have drilled some excellent wells. We now have a very good opportunity to increase our prospective net acreage position in the Eagle Ford to approximate our near-term goal of 25,000 net acres.”