The well are located on the North 40 acreage of the J.B. Tubb leasehold estate in Texas, US.
The deal also calls for additional $4.5m spend in capital expenditures for new drilling and joint development for the Tubb South 40 acreage interests.
EGPI intends to use the sale proceeds to expand the company’s oil and gas operations with a joint development of future wells.
As per the deal, Cubo will finance the production of an initial Ellenburger well, estimated to cost $1,575,000 to a depth of 8,300′.
Cubo has also agreed to finance drilling programes for two additional wells with several additional potential drilling target locations available for development on the South 40 acreage of the estate.
The joint venture partners, EGPI Firecreek, CUBO and operator Success Oil will also pursue new drilling program on the South 40 and further remedation programes in the North 40.
The formations currently available for oil and gas drilling considerations in the South 40 acreage include Glorietta, Upper Clearfork, Tubbs, Lower Clearfork, Witchita Albany, Wolfcamp, Detrital Zone and Waddell.
