TXCO Resources rises, will drill in new location
TXCO Resources Inc. (Nasdaq: TXCO) has signed an agreement to drill in southwest Texas, the oil gas exploration company announced before the opening.
San Antonio-based TXCO has entered into a joint exploration agreement with EnCana Oil & Gas Inc. to drill selected locations in EnCana’s Maverick Basin block in Southwest Texas. EnCana Oil & Gas is an indirectly wholly owned subsidiary of Canadian natural gas producer EnCana.
According to the terms of the agreement, TXCO will have access to approximately 250,000 gross acres in the Maverick Basin and has agreed to drill three horizontal wells before July 31, 2008. EnCana will have a 50% working interest in the wells and in 1,280 acres around each well. Additionally, TXCO will have the option of drilling additional wells prior to July 31, 2009.
“This new joint exploration agreement enhances our continuing relationship with our partner, and provides TXCO the ability to earn a significant portion of the interests in the deeper horizons on 250,000 acres,” said James Sigmon, CEO, president and chairman, in a statement.
TXCO also has interest in western Texas, where it acquired drilling rights in the summer of 2006, as well as in Oklahoma and in the onshore Gulf Coast region.
At 3:41 p.m. ET, TXCO Resources (TXCO) shares had gained $0.95, or 10%, to $10.41. The 52-week high is $14.62, established on Dec. 14, 2006. The 52-week low of $8.46 was touched on Sept. 26.
