Intrepid Potash, Inc. Enters into Third Amendment to Cooperative Development Agreement with XTO Holdings, LLC
January 09, 2024 at 04:30 pm EST
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Intrepid Potash, Inc. entered into a Third Amendment to the Cooperative Development Agreement with XTO Holdings, LLC and XTO Delaware Basin, LLC, as successors in interest to BOPCO, L.P. ("XTO Delaware Basin," and together with XTO Holdings, XTO). The Amendment has an effective date of January 1, 2024. As consideration under the Amendment, on January 2, 2024, Intrepid received a payment of $45 million from XTO, which was in addition to an initial payment of $5 million received from XTO on December 12, 2023.
The Amendment also provides that Intrepid will receive an additional one-time payment equal to $50 million as an "Access Fee," which XTO will pay within 90 days upon the earlier occurrence of (i) the approval of the first new or expanded drilling island within a specific area to be used by XTO, or (ii) within seven years of the anniversary of the effective date. XTO is also required to pay additional amounts to Intrepid as an "Access Realization Fee," up to a maximum amount of $100 million, in the event of certain additional drilling activities by XTO. Pursuant to the Amendment, among other things, Intrepid agrees to support and not oppose XTO's development and operation of XTO's oil and gas interests within the Designated Potash Area (DPA).
Intrepid Potash, Inc. is a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products for customers in agriculture, animal feed and the oil and gas industry. Its segments include potash, Trio, and oilfield solutions. Its three primary products are potash, Trio, and water. It also sells salt, magnesium chloride, metal recovery salts, brines, and water that are derived as part of its mining processes. It sells potash into three primary markets: the agricultural market as a fertilizer input, the industrial market as a component in drilling and fracturing fluids for oil and gas wells and an input to other industrial processes, and the animal feed market as a nutrient supplement. Trio is its specialty fertilizer that delivers potassium, sulfate, and magnesium in a single particle. It sells water primarily for industrial uses in the oil and gas services industry. Its other oilfield related offerings include caliche, right-of-way agreements, and others.