Petroleum Development Corporation (PETD) announced the formation of a joint venture with Lime Rock Partners to develop its properties in the Marcellus Shale. Lime Rock Partners is a privately held company.
Petroleum Development Corporation will put 115,000 net acres that are located in the Appalachian Basin into the venture. The company said that approximately 55,000 of these acres are prospective for the Marcellus shale. The properties currently produce 12 million cubic feet per day of natural gas. Total proved reserves on the acreage are 113 billion cubic feet equivalent.
Lime Rock put $45 million into the joint venture, and Petroleum Development Corporation has an option to receive a future cash contribution of $11.5 million by the end of 2010. Lime Rock Partners must fund in full by December 31, 2011 to earn a 50% interest in the joint venture.