EDF Trading North America LLC, the trading group for French-owned power conglomerate EDF SA, plans to acquire an overriding royalty interest in certain long-lived producing assets in the Haynesville Bossier layer in East Texas from GMX Resources Inc., Oklahoma City, (NYSE: GMXR) for $50 million in a volumetric production payment deal.
The VPP concerns assets in Harrison County and will be for approximately 14.8 billion cubic feet to be produced over the next 94 months commencing Jan. 1, 2011.
GMX will retain all of its oil and NGL production associated with the VPP interests and all of its undeveloped locations. Production of natural gas from these properties attributed to the VPP for 2012 will be approximately 4 billion cubic feet.
The VPP will be treated as a sale for accounting purposes and the company's oil and natural gas properties will be reduced accordingly.
The deal is expected to close before year-end.
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