Eagle Ford Deal Closings – June 2014

Encana Deal is the Largest - $3.1 Billion

Several significant Eagle Ford acquisitions were announced in April and May of 2014. In June of 2014, the details of these acreage deal closings were announced by the buyers, which included Encana Corporation, Sanchez Energy, Panhandle Oil & Gas and Warwick Energy.

Encana Corporation

Freeport-McMoRan Eagle Ford Acreage Map

Freeport-McMoRan Eagle Ford Acreage Map | Click to Enlarge

The Encana deal was by far the largest. The company completed its acquisition of ~45,000 net Eagle Ford acres located in the oil window of Karnes, Wilson and Atascosa Counties from Freeport McMoran on June 20, 2014 for $3.1 billion.

In the first quarter of 2014, the acreage produced 53,000 boe/d. Company officials estimate a drilling inventory of more than 400 locations. The company plans to update its production guidance in its next quarterly report on July 24, 2014.

Read more about the deal: Encana Purchases Eagle Ford Assets from Freeport McMoran

Sanchez Energy

Dimmit County Eagle Ford Shale Map

Dimmit County, TX

Sanchez Energy announced on June 30, 2014 that it closed its massive Eagle Ford acreage deal with Royal Dutch Shell for 106,000 net Eagle Ford acres.

Total consideration for the acquisition was approximately $553.5 million, comprised of the $639 million purchase price less approximately $85.5 million in normal and customary closing adjustments. The transaction was funded from cash on hand from a portion of the net proceeds from the company’s previously issued $850 million senior unsecured 6.125% notes due in 2023.

Read more about the dealSanchez Nearly Doubles Eagle Ford Acreage in $639 Million Deal with Shell

Panhandle Oil & Gas

Panhandle Oil & Gas announced the closing of its Eagle Ford acquisition on June 17, 2014. The deal includes a 16% non-operated working interest in a 11,100 leasehold acres (1,775 net) block that company officials say is held largely by production with 63 producing wells.

Net to the company’s interest, May 2014 production in the newly acquired acreage was 825 boe/d , with an 80% oil cut. The property is currently being developed with a one drilling rig program by the operator, Oklahoma City-based Cheyenne Petroleum Company.

Read more about the deal: Panhandle Oil and Gas Acquires Interest in Eagle Ford Acreage for $80 Million

Warwick Energy

Read more about the deal: Warwick Energy Buys Eagle Ford’s R/C Sugarkane for Undisclosed Amount

Closing details: Warwick Energy Closes Deal for 7,300 Net Eagle Ford Acres

Sanchez Energy’s Reserves Near 60 Million Barrels – Production Surges in Q4

Fourth Quarter Production Up 905% From Q4 2012 and Up 60% From Q3 2013
Sanchez Energy Eagle Ford Map Jan 2014

Sanchez Energy Eagle Ford Map Jan 2014 | Click to Enlarge

Sanchez Energy’s proved reserves are up 178% from a little more than 20 million boe at year-end 2012 to 58.9 million boe at December 31, 2013.

Reserves increased as a result of successful development in the Eagle Ford and multiple acquisitions during 2013.

[Read more…]

Eagle Ford Region Was The Most Active Area For Deals – PWC

Deal Market Cools In 2013, But The Eagle Ford Tops The List Of Activity
Eagle Ford Shale Well Map

Eagle Ford Shale Well Map | Click to Enlarge

The Eagle Ford region topped PWC’s list of shale play merger and acquisition activity in the second quarter of 2013. PWC listed the Bakken, Eagle Ford, and Marcellus as the most active shale plays in terms of deal activity.

The deal market has been slower this year, but there has still been a lot of money changing hands in South Texas.

So far in 2013, there have been more than a dozen significant deals in the Eagle Ford: [Read more…]

Penn Virginia Acquires Eagle Ford Acreage in Gonzales & Lavaca Counties

The company acquired 4,100 net acres for $10 million
Penn Virginia Eagle Ford Acreage Map

Penn Virginia Eagle Ford Acreage Map | Click to Enlarge

Penn Virginia acquired 4,100 net acres in Gonzales and Lavaca counties for $10 million. Working interests owners and joint venture partners will acquire portions of the acreage, so Penn Virginia position will only increase by 3,000 net acres. The company now has 40,100 gross (30,000 net) acres targeting the Eagle Ford.

The acreage is comprised of 3,200 net acres in Gonzales County and 895 net acres in Lavaca County. The acreage in Gonzales is adjacent to company’s development area and the acreage in Lavaca was referred to as “complementary”. The company expects it acquired 30 potential  Eagle Ford drilling locations in total. [Read more…]

Marathon Oil Closing Acquisitions – Ramping Up to 17 Rigs – Q311 Ops

Marathon Oil closed on the Hilcorp acquisition and has added another 19,000 net acres and a gathering system to its Eagle Ford holdings. The company expects to close on another 6,800 net acres in the Eagle Ford soon. That brings Marathon’s total investment up to $4.5 billion for 167,000 net acres and additional gathering facilities. That’s a hefty price tag, but the company believes it has positioned itself in the core of one of the best shale plays in the U.S. Don’t expect development to slow down any time soon.

Early indications are well performance will exceed expectations.  Current plans are to add another frack crew to the play this year and another in 2012 (total of 4) and to ramp up from 10 rigs currently to 17 by this time next year. Marathon has a strong belief in the long-term value of the Eagle Ford. That’s a win for economic development in South Texas. [Read more…]

Lucas Energy Plans Acquisition of Nordic Oil Assets

Lucas Energy has signed a letter of intent to acquire Nordic Oil assets in the Eagle Ford Shale for a 12 month $22 million convertible note with a 6% interest rate. The properties are located in Gonzales, Karnes, and Wilson counties, which means the acreage is prospective in the liquids-rich window of the play.

Based on the Marathon deal, this could be as little as 1,000 acres, but it is not likely Lucas Energy would have paid a similar premium for a much smaller position. [Read more…]