Mayan Energy has signed a farm out agreement for its wholly owned and operated Zink Ranch and Mathis leases in Osage County, Oklahoma, US.
The $2m agreement, signed with Longview Oil & Gas, will give Mayan $50,000 in cash and a 50% carried interest.
Work will comprise one new drill well on each of the Zink Ranch and Mathis leases and five workover's of wells at the Zink Ranch lease.
The agreement is in line with the company’s restructuring strategy.
Mayan Energy CEO Eddie Gonzalez said: "We have been able to do this as a result of a number of factors, including the resolution of the regulatory and legal challenges that were facing the oil and gas operators in Osage County, Oklahoma that have now largely been resolved, our restructuring of our Oklahoma operations and now, finding an investor who was attracted by the prospects offered by our Oklahoma assets.”
“The transaction creates several potential sources of near-to-medium term upside for production, revenues and our share price.”
The company said it intends to expedite the development of its Oklahoma assets.
A 3,500 vertical drill programme will be undertaken at the Mathis new well to target the Mississippian formation with a projected cost of $1.3m.
The Mathis leases are said to have two seismically identified drilling locations at shallow depth of less than 3,500 in the formation.
Meanwhile, the Zink Ranch new well will target and fracture multiple Pennsylvanian sands with a 1,800-2,000 drilling campaign, estimated to cost $350,000.
The five Zink Ranch workovers are aimed at achieving production by fracturing existing tight formations within existing wells to unlock their potential.
An affiliate of the farm-in partner will act as operator with regard to the farm-in work.
The investment programme is expected to begin within 90 days.