UPDA Negotiating with EOG Resources to Farm Out Barnett Shale Drilling Program on 2700 Acres in North Texas - Natural Gas Reserves Conservatively Estimated to Exceed 6.5 Million MCF
HOUSTON--(BUSINESS WIRE)--Universal Property Development and Acquisition Corporation (Pink Sheets: UPDV - News) has entered negotiations with representatives of EOG Resources, Inc. (NYSE: EOG - News) to farm out the drilling of 13 new Barnett Shale natural gas wells on property owned by UPDA in North Texas. Initial negotiations indicate that the transaction will include an upfront cash payment from EOG and a royalty retained by UPDA.
“EOG has shared their estimated reserve calculations with us and indicate they believe these new wells will produce a minimum of 6.5 million MCF of natural gas,” reports UPDA CEO Tim Brink. “At an average price of $4.00 per MCF, that is at least $26 million in revenue we will be sharing. In the proposed transaction, EOG will pay us cash for the acreage, pay all of the expenses for drilling and we will retain an overriding royalty in the production. We will also retain all of the production from our existing wells on the property. Although the final numbers have not yet been negotiated, this is a no lose proposition for UPDA.”