Eni, an Italian multinational oil and gas company, signed an agreement with Quicksilver Resources to jointly evaluate, explore and develop unconventional shale oil in Texas. Eni will earn a 50% share in 52,500 gross acres held by Quicksilver in the Leon Valley area, located in Pecos County (West Texas) approximately 500 miles northwest of Houston, Texas.
An initial three phase program will include the drilling of up to five exploration wells and the acquisition of a 3D seismic survey, aimed at determining the hydrocarbon potential of the area and the subsequent development plan. A joint evaluation team will be formed with members of each company to conduct exploration and development activities, with Quicksilver as operator.
The Leon Valley acreage is located in the prolific Delaware Basin, where current production amounts to nearly 500,000 barrels of oil equivalent per day, both from conventional and unconventional reservoirs. It is estimated that within five years the Delaware Basin production will double, due to the rapid growth of oil production from unconventional reservoirs.
The Delaware Basin is a geologic depositional and structural basin in West Texas and southern New Mexico, famous for holding large oil fields and for a fossilized reef exposed at the surface. Guadalupe Mountains National Park and Carlsbad Caverns National Park protect part of the basin. It is part of the larger Permian Basin, itself contained within the Mid-Continent oil province.This new project gives Eni the opportunity of entering into one of the prolific unconventional shale oil plays in the US through organic growth and with a phased investment program.
In the US Eni holds a working interest in a total of 777 leases, of which 233 are in the Gulf of Mexico, mostly in deepwater, 107 in the North Slope of Alaska and 437 are onshore in Texas, where the company produces unconventional gas from the Barnett shale in partnership with Quicksilver.