Quicksilver Resources Inc. (NYSE:KWK) announced that it has agreed to jointly develop 850,000 acres of oil and gas assets in Colorado’s Sand Wash Basin with SWEPI LP, a subsidiary of Royal Dutch Shell plc (NYSE:RDS.A).
As quoted in the press release:
The parties will each assign to the other a 50% working interest in the majority of their acreage in the Sand Wash Basin so that each party will own a 50% interest in approximately 330,000 acres and have the right to a 50% interest in any acquisition within the AMI. In addition, the agreement provides that SWEPI will pay Quicksilver an equalization payment for 50% of the differential in acreage contributed by Quicksilver in excess of the acreage that SWEPI contributes.
SWEPI will be the operator of the majority of the lands subject to the agreement, although Quicksilver will continue to operate wells it drilled prior to the agreement and other designated lands.