The non-operated working interest in about 50,000 net acres leased by the Company in Atascosa, Frio, La Salle and Zavala counties of Texas is sold for $250m.
Cabot chairman, president and chief executive officer Dan O Dinges said the company has partnered with Osaka to develop its leasehold in the Pearsall Shale.
"We believe the Pearsall Shale could prove to be an additional liquids-rich catalyst in our portfolio and are pleased with the results we have seen to date — both internally and from neighboring peers," Dinges said.
"This transaction will provide the capital necessary to accelerate drilling of this formation, while still maintaining Cabot’s 100 percent interest in our Eagle Ford leasehold."
Under the terms of the contract, Osaka will pay $125m in cash at the closing of the transaction and the remaining $125m to carry 85%of Cabot’s share of future drilling costs in the Pearsall Shale.
The JV has plans to start drilling in July 2012 with two rigs and to add a third and fourth rig in 2013 and 2014 respectively to carry out the drilling program.
Cabot will retain its lease rights on the Pearsall, including the Eagle Ford Shale formation.
Closing of the transaction, including the joint venture agreement, is anticipated to occur on 26 June 2012.
