California Resources, Macquarie form JV to develop oil and gas assets
California Resources (CRC) has partnered with Macquarie Infrastructure and Real Assets (MIRA) to create a joint venture (JV) for the development of oil and gas assets in California, US.
MIRA will initially invest up to $160m in the JV, which will focus on developing assets in the San Joaquin Basin. It is expected to increase its total investment up to $300m, subject to the discretion of the parties.
The JV will focus on the development of CRC’s Kern Front, Mt. Poso, Pleito Ranch and Wheeler Ridge fields. Based on an already mutually approved development plan, the JV will invest in the assets over two years.
With earn out of 90% working interest, MIRA has agreed to fund 100% of the development wells. Based on MIRA’s achievement of agreed return, the working interest of CRC will return from 10% to 75%.
CRC president and CEO Todd Stevens said: “We are pleased to partner with MIRA to bring forward the value of our large and long lived inventory and help to derisk and accelerate the development of CRC’s vast resource base.
“The joint venture also provides additional flexibility to aid in our deleveraging efforts through growing our production and cash flow.”
MIRA senior managing director Paul Beck said: “MIRA is pleased to form this strategic partnership with CRC to develop these high quality oil and gas properties in a world class basin.”
California Resources, which exclusively operates properties in the state of California, is engaged in the explorations, production, gathering, processing and marketing of crude oil, natural gas and natural gas liquids.