Colombian state-controlled petroleum company Ecopetrol (BVC: ECOPETROL, NYSE: EC) has announced the successful closing of a transaction announced July 31, where Ecopetrol entered a joint venture with Occidental Petroleum (NYSE: OXY) to develop 97,000 acres of unconventional deposits in the Permian Basin of Texas.
Ecopetrol subsidiary Ecopetrol Permian LLC has purchased 49% of the Rodeo Midland Basin LLC entity, a Delaware corporation. In the 1.5 Billion USD deal, Occidental will retain 51% of the entity through its affiliate Occidental Midland Basin LLC. Ecopetrol made a down payment of approximately $876.5 million USD of which $126.5 million correspond to the estimated investment in development of the plan for 2019.
The fields already have two drills in action, and two wells are in final stages of completion. They expect production by the end of 2019 and expect to have 4 wells operating by the end of 2020. This gives Ecopetrol proven reserves of 160 million barrels equivalent at the close of 2019.