Hess Takes Control Of Paris Basin Interests
The termination of a partnership agreement with ZaZa Energy Corp. to explore and develop interests in the Paris Basin shale play, will see Hess Corp increase its holding in the primary oil producing region of France.
ZaZa, which incorporated the assets of Toreador Resources Corp, will transfer its 50% working interest in the the partnership's Paris Basin exploration licenses, retaining a 5% ORRI capped at $130 million.
Net total production from the “conventional“ assets is approximately 850 barrels of oil per day (“bopd”), with total 2P reserves of approximately ten (10) million barrels of oil.
Stymied by French legislation banning hydraulic fracturing in unconventional hydrocarbon resource extraction, Toreador set off in a new direction in August 2011 merging with privately held, Houston based ZaZa.
The deal was viewed as being driven by the difficult situation that Toreador faced as a result of French government position on fracking, particularly after the company had undergone an extensive corporate reorganization including relocatation, to focus solely on the Paris Basin shale play.
In August 2011, Toreador said that a one-rig oil exploration Liassic drilling program comprising six wells (without the use of hydraulic fracturing) targeting traditional reservoirs was expected to commence by the end of the year, subject to permitting.
In April 2012, a report commissioned by the French Government recommended the establishment of a national commission on shale exploration and exploitation techniques.
A key focus of the commission will be on determing the conditions for environmentally acceptable hydraulic fracturing operations, including establishing regulations for managing risks and protecting the environment during the experimentation of new techniques to operate on shale oil and shale gas.
The commission will initially focus on the oil shales of the Paris Basin. Test hydraulic fracturing could reportedly occur as early as Spring 2013.
The Paris Basin has been estimated by some reports to hold estimated 100 billion barrels of oil, which could be accessed by hydraulic fracturing technology, presently under ban in France.
ZaZa and Hess expect to sign definitive agreements by June 29th, and close the transaction before August 15th.
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