Clayton Williams inks drilling agreement with Chesapeake to gain Delaware Basin oil play interest

Source: Clayton Williams Energy

Clayton Williams Energy, Inc. (NASDAQ:CWEI) has entered into an agreement with Chesapeake Exploration (NYSE:CHK), whereby Clayton Williams Energy can earn 75% interest in leases held by Chesapeake under approximately 75,000 net acres in the Delaware Basin oil play in southern Reeves County, Texas. 

The acreage is in the center of a developing oil and gas play called the “Wolfbone” where wells produce from the Avalon Shale, Bone Springs and Wolfcamp formations at depths from 8,000 to 13,000 feet. 

Clayton Williams has a commitment to drill at least 20 earning wells in the first year and an option to drill an additional 20 earning wells per year during the next four years to earn all of Chesapeake’s acreage. Clayton Williams will carry Chesapeake for one-quarter of the costs in earning wells, which shall earn it a 75% interest in 640 net acres. Subsequent wells in an earned area shall be drilled on a heads-up basis. Clayton Williams will receive credit towards its annual drilling obligations for drilling more than 20 earning wells in any year. 

“This is a major opportunity for our company, and we will focus significant resources to this development project,” stated Clayton W. Williams, Jr. 

Sign up for PennEnergy's eNewsletters


For Email Newsletters you can trust

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs