Junex (CVE: JNX) and Cuda Energy Inc. have announced a strategic business partnership, which will operate under the name Cuda Oil and Gas Inc.

The newly formed Cuda Oil and Gas has also announced it has entered into an agreement to acquire 25,000 gross acres of high growth light oil asset in the Powder River Basin in Wyoming from an undisclosed party for a consideration of $37 million.

These assets are currently producing approximately over 1,000 BOE/d of high netback (92% light oil) production entirely from the Shannon formation. Cuda has identified up to 70 infill locations into the Shannon formation which will be drilled vertically for ~US$1.0 million per well, recover approximately 150 mbbl of oil per well and are forecasted to generate IRRs of >200% and payout in less than 8 months.

Cuda also plans on developing four additional zones near where several large U.S. independents, including EOG Resources, Inc. (NYSE: EOG) and Chesapeake Energy Corp. (NYSE: CHK), have producing horizontal wells.

Cuda plans to drill a deep stratigraphic test well to validate the potential of these deeper zones for conventional and unconventional reserves before the end of 2018.

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