EP Energy and Tesoro have formed a drilling joint venture (JV) to finance oil and natural gas development in the former’s Altamont programme located in the Uinta Basin of Utah, US.
The companies have also signed a crude oil supply agreement which entails supply of yellow and black waxy crude oil to Tesoro's Salt Lake City refinery.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Under the deal, which involves a 60-well programme, Tesoro will provide a capital carry to acquire 50% of EP Energy's working interest in the JV wells.
EP Energy chairman, president, and CEO Brent Smolik said: "This JV will enable us to significantly increase the well-level returns and capital efficiency of our programme."
"We plan to keep two rigs active in the Uinta Basin and look forward to building a long-term relationship with Tesoro, an in-basin refinery partner."
In line with the crude oil supply agreement, Tesoro has also agreed to purchase all of the oil from the JV wells.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataTesoro chairman, president and CEO Greg Goff said: "This agreement with EP Energy is an important step to further enhance our integrated value chain in the Rockies by supporting the growth of waxy crude oil production in the Uinta Basin, and allowing us to secure additional supply of this advantaged crude oil to further optimise the operation of our Salt Lake City Refinery."
Production from the first wells under the JV will commence in July this year.
EP Energy currently has an average working interest of about 80% in the JV wells and will retain operational control of these assets.
