Quicksilver Resources Inc. said Monday that it has agreed with a subsidiary of Royal Dutch Shell PLC to jointly develop their oil and gas interests in Colorado’s Sand Wash Basin and to establish an area of mutual interest covering more than 850,000 acres in the basin.
Quicksilver and the Royal Dutch Shell unit SWEPI LP will each assign to the other a 50 percent working interest in the majority of their acreage in the basin so that each party will own a 50 percent interest in about 330,000 acres and have the right to a 50 percent interest in any acquisition within the area of mutual interest, Quicksilver said.
In addition, SWEPI will pay the Houston-based natural gas producer an equalization payment for 50 percent of the difference in acreage contributed by Quicksilver that exceeds the acreage that SWEPI contributes.
SWEPI will operate most of the lands subject to the deal, although Quicksilver will continue to operate wells it drilled before the agreement and other designated lands.
The deal is expected to close by the end of the year and is subject to customary closing conditions.
Shares of Quicksilver Resources rose 5 cents to $4.16 in morning trading Monday, while U.S. shares of Royal Dutch Shell slipped 55 cents to $71.04.