Texas American Resources Company (“TARC” or the “Company”) today announced that its affiliate TARH E&P Holdings. L.P. (“TARH”) has completed a farmout on a portion of its Eagle Ford and Buda acreage in South Texas. This transaction is strategically important as it will allow the Company to develop a portion of its lease acreage that was otherwise subject to continual drilling obligations or primary lease term expirations. If all options in the farmout agreements are exercised, TARH would farmout 50% of its interest in approximately 6,075 leasehold acres prospective for the Eagle Ford and Buda formations. All of the consideration in the transaction is in the form of a drilling carry. The drilling carry will fund the majority of the Company’s 2011 South Texas capital expenditure budget.
David Honeycutt, President and CEO of TARC said, “Texas American is excited about moving forward on our two-pronged oil-prone strategy in the Eagle Ford and Buda formations. The farmout will allow us to de-risk all of our acreage in LaSalle and Frio Counties through drilling carry while continuing to retain operatorship and 50% ownership. This was our goal from the start since we are a long-standing operator in the area.”
Source: PR Newswire