Quarterly report pursuant to Section 13 or 15(d)

5. Joint Venture

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5. Joint Venture
9 Months Ended
Sep. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]  
Joint Venture

On July 20, 2015, the Company signed a definitive agreement with an affiliate of Merced Capital (“Merced”) to form a joint venture that will acquire and develop Williston Basin non-operated assets. The joint venture will be funded by Merced with an initial investment target of $50 Million. Investments will be subject to Merced approval, and will be managed by the Company.

 

The joint venture assets will be managed by the Company in exchange for a management fee and reimbursement of third party expenses, and, after certain investor hurdles are met, the Company will receive a share of profits in the joint venture. The Company will also have the option to co-invest up to 25% on acquisitions and capital expenditures alongside the venture and any such co-investments will reside directly with the Company. Upon the sale of joint venture assets, the Company will also have the option to bid and acquire the assets.

 

We have not yet commenced operations pursuant to this joint venture, but continue to actively evaluate investment opportunities with Merced.