Goodrich Petroleum Announces Expansion of Its Cotton Valley Trend Acreage With Farmout on 16,000 Acres in Northwest Louisiana
Goodrich Petroleum Corporation announced that it has entered into a definitive farmout agreement covering 16,000 acres in 33 sections (21,000 gross acres), in the Alabama Bend field of Bienville Parish, Louisiana. The Alabama Bend field is in the Company’s Cotton Valley trend, located approximately 8 miles southeast of the Elm Grove field and approximately 15 miles east of the Company’s Bethany-Longstreet field in northwest Louisiana. The Cotton Valley is the primary objective, with additional potential in the Hosston and Bossier.
Under the terms of the farmout agreement, the Company has farmed in the right to explore for natural gas and oil, at no upfront cost to the Company, in 33 sections (21,000 acres), with current leases totaling approximately 16,000 gross acres. The Farmor reserves an overriding royalty interest equal to the difference in lease burdens and 25%, thereby turning to the Company a 75% net revenue interest. The Company will own a 100% interest in the initial well drilled in each of the 33 sections and the Farmor shall have the right to participate for up to 50% on subsequent wells drilled in each section or unit. To maintain the rights to the entire acreage block, the Company must drill one well every 90 days from completion date of the previous well.
Commenting on the transaction, Robert C. Turnham, Jr., the Company’s President stated, “We are pleased to announce this agreement, which expands our gross Cotton Valley trend acreage position by approximately 11% to 160,000 gross (103,000 net) acres, which if fully prospective, would add up to 400 additional vertical well locations on 40 acre spacing. We remain focused on developing our existing acreage, but will continue to add to our drilling inventory when opportunities arise.”
Certain statements in this news release regarding future expectations and plans for future activities may be regarded as “forward looking statements” within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as financial market conditions, operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
Goodrich Petroleum is an independent exploration and production company listed on the New York Stock Exchange. The majority of its oil and gas properties are in Louisiana and Texas.
Source: Goodrich Petroleum Corporation