Austin Exploration forms Colorado JV

THE ROADHOUSE BOWSER: Austin Exploration (ASX: AKK) announced the formation of a Joint Venture with Pierre Energy Partners to develop Pierre Shale prospects at the company’s 100 per cent-controlled 11,560 acre oil and gas property in Fremont County, Colorado.

Austin and Pierre Energy have agreed to terms for two Pierre wells to be drilled back-to-back in April and May.

Under the terms of the JV Pierre Energy will carry Austin on the drilling costs to earn 50 per cent of the oil production from C18#3 and C18#4 exploration wells.

Austin will pay for the completion costs of the wells in the event of a discovery.

“This agreement effectively advances the development of our Pierre shale opportunity without up-front cost or risk to Austin,” Austin Exploration chief operations officer Guy Goudy said in the company’s announcement to the Australian Securities Exchange.

“We have worked with several companies on our Colorado property and this company drilled the last Pierre well on our Colorado property and performed a safe, efficient, cost effective and overall outstanding job and this provides us with great confidence that they are an efficient and superior partner to other interested parties.”

Austin also announced it is in advanced negotiations with Pierre Energy, are in advanced negotiations for a long-term partnership with the objective of a continuous drilling program for the property.

The company explained the next phase of this program would see Pierre Energy drilling ten wells in exchange for a 50 per cent ownership of the Pierre formation over the 11,560 acre property.

Pierre Energy would earn this 50 per cent upon drilling completion of the tenth well and until then would earn 50 per cent of Austin’s NRI for each well bore.

After the ten wells are completed in phase two, Pierre LLC, will drill a minimum of two wells per year and Austin will complete the wells for production cash flow.

Website: www.austinexploration.com