California Resources Corporation and Macquarie Infrastructure and Real Assets announced today that they have formed a strategic joint venture in which MIRA has committed to fund $160 million for the development of oil and gas properties in California, with a focus on development opportunities in the San Joaquin Basin. Subject to the discretion of the parties, MIRA may increase its total investment to up to $300 million.
“We are attracted to CRC’s operational expertise, technical understanding and substantial infrastructure in the San Joaquin Basin.”
The initial commitment, relating to multiple development opportunities in CRC’s Kern Front, Mt. Poso, Pleito Ranch and Wheeler Ridge fields, is intended to be invested over two years in accordance with an already mutually approved development plan. MIRA will fund 100 percent of the development wells in which it will earn a 90 percent working interest. CRC’s working interest will revert from 10 to 75 percent upon MIRA achieving an agreed return.
Todd Stevens, President and CEO of CRC, noted, “We are pleased to partner with MIRA to bring forward the value of our large and long lived inventory and help to derisk and accelerate the development of CRC’s vast resource base. The joint venture also provides additional flexibility to aid in our deleveraging efforts through growing our production and cash flow.”
“MIRA is pleased to form this strategic partnership with CRC to develop these high quality oil and gas properties in a world class basin,” said Paul Beck, Senior Managing Director in Macquarie Infrastructure and Real Assets. “We are attracted to CRC’s operational expertise, technical understanding and substantial infrastructure in the San Joaquin Basin.”
Source: California Resources Corporation
Date: Apr 19, 2017