Abraxas Petroleum (AXAS) announced the formation of a joint venture with Blue Stone Oil & Gas, LLC, a private oil and gas company, to develop acreage in the Eagle Ford Shale in Texas.
Abraxas Petroleum is contributing 8,333 net acres in the Eagle Ford Shale to the joint venture for a $25 million equity interest. Blue Stone Oil & Gas, LLC will contribute $25 million initially to the joint venture and commit to another $50 million.
Once the joint venture is fully funded, Abraxas Petroleum will own 25%, and Blue Stone Oil & Gas, LLC will own 75%.
Abraxas Petroleum will operate the Eagle Ford Shale wells, and Blue Stone Oil & Gas, LLC will handle other affairs of the joint venture. The initial capital will be used for seismic surveys and to drill and complete wells in the Eagle Ford Shale.
