In April 2012, the Company announced that through its wholly-owned subsidiary, Contaro Company, it had entered into a Limited Liability Company Agreement (the "LLC Agreement") in connection with the formation of Exaro Energy III LLC ("Exaro"). Pursuant to the LLC Agreement, the Company has committed to invest up to $82.5 million in cash in Exaro over the next five years together with other parties for an aggregate commitment of $182.5 million, or a 45% ownership interest in Exaro.
In August 2012, one of the other investors in Exaro exercised its right to assume $15 million of the Company's commitment, which lowered the Company's commitment to $67.5 million and its ownership interest to 37%. As of March 31, 2013, the Company had invested approximately $46.9 million in Exaro.
Exaro has entered into an Earning and Development Agreement with Encana Oil & Gas (USA) Inc. ("Encana") to provide funding of up to $380 million to continue the development drilling program in a defined area of Encana's Jonah field asset located in Sublette County, Wyoming. This funding will be comprised of the $182.5 million investment described above, debt, and cash flow from operations. Encana will continue to be the operator of the field and upon investing the full amount of the $380 million, Exaro will have earned 32.5% of Encana's working interest in a defined joint venture area that comprises approximately 5,760 gross acres.
As of May 8, 2013, the Exaro-Encana venture had 43 new wells on production, producing at a rate of approximately 9.2 Mmcfed, net to Contango, plus an additional six wells that were either in the completion or fracture-stimulation phase. We continue to have three drilling rigs running on this project.