Summary
Expand Energy Corp. (EXE) announced the closing of a significant project cooperation agreement with CNOOC International Limited, a subsidiary of CNOOC Limited, on November 16, 2010. This agreement involves CNOOC acquiring a 33.3% undivided interest in EXE's 600,000 net leasehold acres within the Eagle Ford Shale project in South Texas. This strategic partnership is expected to bolster EXE's exploration and production capabilities in a key shale play. The transaction included an upfront cash payment of $1.08 billion, with an additional $40 million adjustment at closing. Furthermore, CNOOC has committed to funding 75% of EXE's share of drilling and completion costs up to $1.08 billion, anticipated by the end of 2012. This substantial capital infusion and shared risk model provide significant financial backing for Expand Energy's ongoing development of the Eagle Ford Shale, offering positive implications for its future growth and operational capacity.
Key Highlights
- 1CNOOC International Limited acquired a 33.3% interest in Expand Energy's 600,000 net acres in the Eagle Ford Shale.
- 2The transaction closed on November 16, 2010.
- 3Expand Energy received $1.08 billion in cash plus a $40 million payment adjustment at closing.
- 4CNOOC Limited will fund 75% of Expand Energy's share of drilling and completion costs.
- 5This funding commitment is capped at $1.08 billion and is expected to be utilized by year-end 2012.
- 6The agreement represents a significant strategic partnership for Expand Energy in the Eagle Ford Shale play.