Italy's Eni has agreed to pay up to $52 million to jointly explore and develop US shale oil acreage in the Delaware Basin with US shale player Quicksilver Resources, the Italian company said Tuesday.

Under the deal, Eni will earn a 50% share in 52,500 acres (212 sq km) held by Quicksilver in the Leon Valley area, located in Pecos County some 800 km northwest of Houston, Texas.

Eni said the agreement covers an initial three-phase program that includes the drilling of up to five exploration wells and the acquisition of a 3D seismic survey.

In return for a 50% interest in Quicksilver's acreage, Eni said it will pay up to $52 million representing 100% of the drilling, completion and seismic costs.

The agreement will also give Eni half of Quicksilver's interest in another 7,500 gross acres located in the Leon Valley area, it said.

Eni already produces shale gas from the US' Barnett shale under a partnership with Fort Worth-based Quicksilver which it entered into in 2009.

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Source: http://www.platts.com