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UPDATE 1-ZaZa Energy ends Hess JV, gets oil-rich acreage
June 11 |
June 11 (Reuters) - Oil and gas company ZaZa Energy Corp's land holdings in the oil-rich Eagle Ford shale field in Texas will jump six fold, after the company agreed to end its exploration and development agreements with Hess Corp.
Shares in ZaZa, valued at about $417 million, rose 35 percent to touch a three-week high of $4.20 on the Nasdaq on Monday.
Hess and ZaZa will end their agreements in the Eagle Ford shale and France's Paris Basin. They will also swap certain oil, gas and mineral interests, well bores and production, ZaZa said.
As a result, ZaZa's land holdings in the Eagle Ford shale will rise to about 72,000 net acres.
Hess has already paid $15 million in cash to ZaZa and will pay an additional $70 million once the deal closes, likely before Aug. 15.
ZaZa also said its lead investors agreed to waive certain defaults under its debt program after it consented to paying down $33 million of the $100 million borrowed in notes.
The company, which in April received a non-compliance notice from the Nasdaq for failing to timely file its annual report, said the waiver included ZaZa's failure to file its financial reports with the U.S. securities regulator.
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