Emerald Oil Enters Agreement With Koch Oilfield Lodging
Months after Emerald Oil Inc.’s (EOX) Delaware Basin acquisition fell apart, the Denver E&P has entered agreements to sell working interest in the Bakken Shale as well as a possible midstream oilfield lodging joint venture, the company said Aug. 3.
Emerald said it entered a purchase and sale agreement in July with Koch Exploration Co. LLC, a subsidiary of Koch Industries Inc., totaling about $24.4 million. Proceeds will be used to repay outstanding borrowings on the company’s revolving line of credit.
Under the agreement, Koch will acquire a 30% working interest in its undeveloped southern drilling spacing units in McKenzie County, N.D., for $16.6 million. Koch Exploration separately agreed to acquire a portion of Emerald’s undeveloped oilfield lodging leasehold in Richland County, Mont., for $900,000.
Emerald and Koch also entered into a 2016 drilling agreement for two wells in southern McKenzie on two undeveloped drilling spacing units. An area of mutual interest (AMI) has been established as part of the deal so that costs leasehold and acreage acquisitions will be split evenly between the companies.
Koch will reimburse Emerald for their proportionate 30% share of existing authorization of oilfield lodging expenditures (AFEs) in southern McKenzie.