ZaZa Energy Corp. announced Wednesday it has entered an agreement with Vermilion Energy to sell its assets in the Paris Basin for $85.8 million.
The sale is expected to close by the end of the year, according to the company.
ZaZa has acreage in the Eagle Ford shale and the Eaglebine, north of Houston, along with 24,300 acres in the Paris Basin.
“It strengthens our balance sheet and provides us with additional working capital to drill in the Eaglebine and Eagle Ford plays,” Brooks said in a statement.
The company announced last week it will begin hydraulic fracturing of its first well in the Eaglebine — an area north of Houston which many operators also call the Woodbine — later this month.
ZaZa has almost 90,000 acres in the Eaglebine and about 72,000 acres in the Eagle Ford. It gained the Paris Basin acreage in a merger earlier this year with France’s Toreador Resources Corp. and last summer ended a joint venture with Hess Corporation, with whom it had been actively leasing in the Eagle Ford.
As part of the unwinding of that agreement, Hess retained unconventional drilling rights in the French Basin, while ZaZa received $84 million in cash, conventional drilling rights in the basin and 60,500 acres in the Eagle Ford.
ZaZa will hold $15 million of the proceeds from the sale to Vermilion in escrow until all Paris Basin exploration permits are successfully transferred to Hess, according to ZaZa’s announcement.