EGPI intends to use the sale proceeds to expand the company’s oil and gas operations with a joint development of future wells.
The deal also calls for additional $4.5m in 2012 capital expenditures for new drilling and joint development for the Tubb South 40 acreage interests.
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 programmes 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 programme on the South 40 and further remedation programmes 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.
