Seeking Alpha

ZaZa slides after launching JV with private equity fund

  • ZaZa Energy (NASDAQ:ZAZA) shares were not helped today by news of a joint venture with P-E firm Quantum Energy Partners to develop some of its oil and gas properties in east Texas; shares fell 3.7%.
  • Under the new agreement, ZaZa will assign ~6K net acres of undeveloped land in exchange for $17M in cash and subscription rights to acquire an additional share of Quantum's ownership stake in the first 15 wells created through the partnership over the next two years.
  • ZaZa will retain its interest in all existing wells as well as the right to participate with Quantum's working interest in its reserved wells; Quantum will be reimbursed for its service and administrative costs with the JV.
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