Black Ridge Oil & Gas Inc. and Merced Capital signed a definitive agreement to form an entity that will acquire and develop Williston Basin nonoperated assets, Black Ridge said July 23.

Merced will fund the joint venture (JV) with an initial $50 million target investment. Merced will approve investments, which will be managed by Black Ridge, the company added.

Black Ridge will receive a share in profits after investor hurdles are met, and will be able to co-invest up to 25% on acquisitions and capex. These co-investments will belong solely to it, Black Ridge added.

Black Ridge can also bid and acquire JV assets that are sold.

Through the JV, Black Ridge can participate in high-return capital projects without diluting shareholders, and create a long-term partnership with Merced.

Ken DeCubellis, CEO, said that the Teton project’s startup and the JV with Merced provide a good future for Black Ridge’s shareholders.

Black Ridge Oil & Gas Inc. and Merced Capital are both based in Minnetonka, Minn.