From Earlier: Energen Unit Signs Delaware Basin Joint Exploration Option Agreement

Energen Corporation

yesterday announced that its oil and gas exploration and production subsidiary has entered into a definitive agreement with BHP Billiton

that could lead to the joint drilling and development of 56,549 net acres currently under lease to Energen Resources Corporation primarily in Reeves County, Texas, in the Delaware sub-basin of the Permian Basin. BHP Billiton has agreed to buy a 50 percent undivided interest in three existing wells in Reeves County from Energen Resources for approximately $18 million. As a result of purchasing the wells, and subject to initiating horizontal completions of two wells, BHP Billiton will own a 50 percent undivided interest in 4,829 net acres. BHP Billiton will carry Energen Resources in completion operations of the two wells. Under terms of the agreement, BHP Billiton also has the option to purchase a 50 percent undivided interest in 51,720 net acres on or before May 1, 2012, after initiating horizontal completion of one of the wells.