While the impact on Kingfisher County production wasn’t immediately clear, an agreement between Devon Energy Corp. and Dow will allow some of its undeveloped holdings to be drilled in the STACK play.

Under the terms of the joint venture announced by Devon last week, the energy company will transfer ownership of half its working interest on wells it plans to drill over the next four years at 133 infi ll locations.

For its part, Dow will provide Devon about $100 million to fund drilling costs.

The amount of working interest to be shared by the two companies on the infi ll wells, to be drilled with standard and extended reach laterals, is about 60%.

Devon said Tuesday that the agreement is expected to allow it to meet its production targets for 2020.

The first drilling units expected to be worked under the agreement are located in northern Canadian County and work is expected to begin there in mid 2020.

Devon officials said the company retains all of its production and cash fl ow from existing STACK operations.

“This innovative agreement is consistent with our strategy to optimize the capital effi ciency and returns associated with our development programs,” said Dave Hager, Devon’s president and CEO. “Dow is a world-class organization and this mutually benefi cial agreement will help us bring forward value in the STACK, while delivering carry-enhanced returns that compete effectively for capital within our portfolio.”

“We are excited to expand our relationship with Dow to develop a portion of our liquids-rich acreage in the STACK,” said David Harris, Devon’s executive vice president, exploration and production. “This agreement will benefi t from the improvements in capital efficiency achieved in the play this year, driven by optimized infi ll development spacing and substantially lower drilling and completion costs.”

Devon’s shares saw a 1.2% increase in value after the announcement.

Chad Warmington, president of the Petroleum Alliance of Oklahoma, hailed the agreement as “good news for Oklahoma.”

The state has seen a progressive decline in rig counts as many oil companies turned their attention, and their capital, to the currently more lucrative Permian Basin.