Lonestar Resources Enters Into Eagle Ford Shale Joint Development Agreement
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Lonestar Resources has entered into a joint development agreement (JDA) in Gonzales County with one of the largest producers in the Eagle Ford Shale which encompasses an area of mutual interest (AMI) totaling approximately 15,000 acres.
The agreement calls for Lonestar to operate a minimum of three to four Eagle Ford Shale wells annually on behalf of the two companies through 2022 that are intended to hold-by-production (HBP) approximately 6,000 gross acres within the AMI. The agreement gives Lonestar’s partner the option to participate in each well with a 50 percent WI or to participate via a carried working interest that ranges from approximately 9-17 percent, depending on location. The JDA, which requires lower levels of annual gross drilling activity than Lonestar has engaged in on its own since becoming active in Gonzales County in 2016, provides significant benefits for both parties.
For Lonestar, the joint development agreement significantly expands and consolidates the leasehold footprint associated with its prolific Hawkeye area, which is Lonestar’s oiliest asset. The JDA also allows for the two companies to consolidate their respective positions into a single development plan which should: 1) maximize lateral lengths; 2) optimize economic returns; and 3) efficiently HBP the combined leasehold with the fewest number of wells.
In addition, the JDA will allow Lonestar to increase its inventory of gross drilling locations by roughly 50 percent in the Hawkeye area to a total of 32 while delivering average lateral lengths of over 9,500’, with many locations exceeding 12,000’.
“This venture is a win-win for both parties and is illustrative of how Lonestar continues to leverage its drilling and completion prowess into new growth opportunities without upfront capital. Further, the venture provides a clear path of development for our Cyclone/Hawkeye asset, which is the oiliest asset in the company, and now encompasses 72 long-lateral drilling locations that offer highly attractive returns at current commodity prices,” said Lonestar’s Chief Executive Officer, Frank D. Bracken, III.
About Lonestar Resources
Lonestar is an independent energy company, focused on the development, production and acquisition of unconventional oil, natural gas liquids and natural gas properties in the Eagle Ford Shale in Texas.
To stop by Lonestar’s website, CLICK HERE
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