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DEJ pre pop on JV venture

08:51 AM EDT, 07/01/2014 (MT Newswires) -- Dejour Energy (DEJ) shares jumped in Tuesday's pre-market session, after the oil-and-gas explorer and producer said it formed a joint venture with a private U.S.-based exploration-and-production company to develop its core Kokopelli leasehold in the Piceance Basin region of Colorado.
Dejour said it received about $3.8 million at closing and is carried for 25% for $16 million in drilling, completion and permitting expenditures beginning in August. "It is anticipated this funding will carry Dejour through a minimum of eight new wells and extensive facility development on Kokopelli's southern leasehold where four natural gas wells drilled in 2013 are currently in production," the company said.
It is retaining a 25% working interest in the Kokopelli joint venture and will transfer operatorship of the Kokopelli project to the private joint-venture partner, resulting in a 70% general-and-administrative expense reduction for Dejour USA. The company said it is fully retiring the CAD3.5 million of debt associated with the U.S. property in addition to reducing overhead costs in the U.S. operation.
DEJ was up 15% at $0.24 in recent pre-market trading, in a 52-week range of $0.09 to $0.31.
The joint venture will initially focus on developing production from the Williams Fork formation on Dejour's southern leasehold, with the expectation of drilling a minimum of eight wells to at least the base of the Williams Fork gas/liquids bearing zone and obtaining an approved Surface Utility Agreement, currently being developed in consultation with the Bureau of Land Management and the Colorado Parks & Wildlife, for the 1,520-acre north lease, the company said.
Price: 0.24, Change: +0.03, Percent Change: +15.38
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