ZAZA ENERGY CORPORATION ZaZa Energy Corporation has signed a Second Amendment and First Restatement of Joint Exploration and Development Agreement with its current joint venture partner, to further develop and expand its Eaglebine/Eagle Ford East assets. ZaZa's joint venture partner has elected into Phase II ahead of the schedule set in the original agreement. As consideration for the Phase II election, ZaZa will receive $17 MM in cash consideration and interests in 15 of its venture partner's wells outside of the Area of Mutual Interest line in Madison County with a PDP present value of $3 MM based on an independent reserves report.
In addition to the preceding, ZaZa will receive 100% carry consideration for one vertical well completion, two horizontal well completions and a $1.25 MM credit towards miscellaneous land or operational expenses. In return, ZaZa will assign to its joint venture partner 20,000 net Phase II acres. The company also continues to anticipate timely drilling and completion of three carried Phase I obligation wells.
As consideration for the assignment of at least 6,000 net former Phase III acres, ZaZa will receive additional interests in the Southern Madison Wells with an incremental PDP present value of approximately $9 million based on an independent reserves report. Pro forma for this transaction, ZaZa will retain approximately 14,000 net Phase III acres, and its joint venture partner has the option to elect into some or all of this acreage on or before January 31, 2014, by making a further cash payment to ZaZa. The original agreement called for a Phase III election by January 31, 2015.
The Company's joint venture partner will assign to ZaZa a 25% working interest in approximately 19,000 net additional acres recently acquired by its venture partner in the Agreement's AMI and related AMI interests in multiple producing wells with a PDP present value of approximately $4.1 MM. The company also expects additional production in the near future from two recently drilled wells, in various stages of completion, within this newly assigned acreage. In return for the 25% working interest and immediately available production, ZaZa will pay $2 MM and assign a 75% working interest in approximately 18,500 net acres of its retained acreage position in Walker and Madison Counties, Texas.
