Goodrich Eagle Ford Shale Acquisition

Goodrich Petroleum diversifies outside of the ArkLaTex Basin. The company is very much gas weighted and this deal adds a liquids/oil component to the company’s drilling inventory.  Goodrich paid $59 million (~$1,700 per acre) for 35,000 acres in the Eagle Fors Shale in La Salle County and Frio County.

“The company plans to acquire an average 70% leasehold interest in roughly 50,000 gross (35,000 net) acres within the oil window of the Eagle Ford Shale play in La Salle and Frio Counties, Texas for roughly $59 million ($15mm cash, $44mm carry).”

“The company expects to spud its initial Eagle Ford Shale well later in the second quarter and run 1 – 2 rigs in the play during the second half of the year and currently expects to spud 7 – 8 Eagle Ford Shale wells during 2010. Jefferies & Co. believes this ‘will come primarily at the expense of [Goodrich Petroleum’s] Cotton Valley program, which had $46 million earmarked for ’10 for a seven well program.’ ”

“Jefferies believes the company enters the Eagle Ford at an attractive price. The price ‘comps well versus Petrohawk’s recent acquisition in overpressured De Witt County at $3,000/acre, Petrohawk’s joint venture with Swiftin McMullen also at $3,000/acre as well as BP’s JV with Lewis (private) estimated at $4-5,000/acre. On the other hand, HK also bought into their normally pressured Red Hawk position in Zavala County for $200/acre.”

Read the full news release at

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Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.