California Resources has set up a strategic joint venture with Macquarie Infrastructure and Real Assets (MIRA), in which MIRA has committed to fund $160m for the development of oil and gas properties in California, with special focus on development opportunities in the San Joaquin Basin.
As per the agreement, the investment could be increased to up to $300m at the discretion of the parties.
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The mutually approved development plan entails the initial commitment relating to multiple development opportunities in CRC’s Kern Front, Mt. Poso, Pleito Ranch and Wheeler Ridge fields over two years.
The development wells will be completely funded by MIRA. This enables the firm to earn a 90% working interest.
The working interest of California Resources will revert from 10% to 75% upon MIRA achieving an agreed return.
California Resources president and CEO Todd Stevens said: “We are pleased to partner with MIRA to bring forward the value of our large and long lived inventory and help to de-risk and accelerate the development of CRC’s vast resource base.
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By GlobalData"The joint venture also provides additional flexibility to aid in our de-leveraging efforts through growing our production and cash flow.”
Macquarie infrastructure and real assets senior managing director Paul Beck said: “MIRA is pleased to form this strategic partnership with CRC to develop these high-quality oil and gas properties in a world-class basin.
“We are attracted to CRC’s operational expertise, technical understanding and substantial infrastructure in the San Joaquin Basin.”
California Resources Corporation is an oil and natural gas exploration and production company.
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. It acts on behalf of institutional, corporate and retail clients and counterparties.
