Triad Hunter Enters Into Joint Venture Agreement With Eclipse Resources To Drill Horizontal Wells In Monroe County, Ohio

Published: Jan 02 2013
Deal Summary

Triad Hunter, LLC, a subsidiary of Magnum Hunter Resources Corporation, entered into a joint venture agreement with Eclipse Resources I, LP, an oil and gas exploration company, to drill 12 Marcellus Shale and 12 Utica Shale horizontal wells over the next three years in Monroe County, Ohio.

The contract area covers approximately 1,950 net mineral acres in the Marcellus Shale and Utica Shale formations. The total combined capital costs associated with the drilling in the contract area is estimated to exceed $200m. Triad Hunter will be the operator in the contract area and Triad Hunter and Eclipse Resources, each, will own 47% interest in the contract area, while the remaining 6% will be held by third parties. Eclipse Resources also agreed to commit its share of production from the contract area to a new pipeline system under construction by Eureka Hunter Pipeline LLC, a subsidiary of Magnum Hunter.

The joint venture will enable both the partners to further expand their foot print in Marcellus Shale and Utica Shale formations in Ohio.

Mr. James W. Denny, III, president of Triad Hunter, said, “We are pleased to partner with such a formidable competitor in our region such as Eclipse Resources. Our geological interpretation of this area indicates the potential to yield not only high volume wells in the Utica Shale, but it is also located within the liquids-rich regime of the Marcellus Shale where Triad Hunter has already drilled two successful Marcellus wells immediately adjacent to these properties. Due to the treacherous terrain in this region and the need to minimize our collective footprint, forming partnerships like this enable us to maximize drainage of our leasehold position. This joint venture allows Triad Hunter to continue its strategy of developing high-quality reserves, while providing our midstream affiliate, Eureka Hunter Pipeline, the opportunity to further expand its footprint into Ohio."

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