Salt Lake City, Utah-based Questar on Tuesday said its Wexpro subsidiary has formed a joint venture with Laramie Energy II’s Piceance Energy unit to develop natural gas-producing assets in western Colorado’s Piceance Basin.

Wexpro expects to spend $60 million to $70 million on an 80-well drilling program targeting the Mesaverde formation, Kallanish Energy finds.

The partners will begin drilling in the Collbran Valley in Mesa County, Colorado, in October, and continue through early 2017. The JV also provides Wexpro options to acquire development rights for deeper formations and, with mutual consent, to significantly extend and expand the drilling program up to 300 wells, depending on commodity prices.

“We are excited to partner with Laramie Energy,” said Ron Jibson, Questar’s CEO. “Laramie’s extensive experience in the Piceance Basin and our historic success in exploring and developing reserves in the Mesaverde formation in other basins of the Rockies is a good match.”

Under the terms of agreements in Utah and Wyoming, Wexpro currently produces gas from properties at cost of service benefiting Questar Gas’s utility customers.

Wexpro believes similar cost-of-service arrangements can benefit customers or partners who purchase volumes of natural gas production and would like to create a long-term price hedge on a portion of their supply needs.

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