Goodrich Petroleum Considers Sale of Eagle Ford Assets

Company Slashes Capital Spending in 2015
Goodrich Petroleum Eagle Ford Map

Goodrich Eagle Ford Map | Click to Enlarge

Eagle Ford player Goodrich Petroleum is considering selling all or a portion of its Eagle Ford Shale acreage in the first half of 2015. In early December of 2014, the Houston, TX-based company announced its Board of Directors had authorized management to “explore strategic alternatives” for the assets.

Goodrich, which has invested significantly in the Tuscaloosa Marine Shale (TMS) in South Louisiana and Mississippi, also announced its capex budget for 2015 this month at $150-million – $200-million. That’s much less than the than $375-million budget the company projected in 2014, according to Goodrich’s annual report. Company officials indicate about 95% of Goodrich’s 2015 budget will be earmarked for drilling in the TMS.

Read more: Goodrich Increases 2014 Budget by 50% and is Shifting to Tuscaloosa Marine Shale

Since June of 2014, the price of oil has dropped by nearly 50%, and Goodrich’s pullback on capital investment is a strong indication of the impact of lower crude oil prices on shale oil operators. Company officials indicate a whole or partial sale of its Eagle Ford assets would significantly enhance the company’s flexibility to further expand its development activities under better market conditions.

Goodrich has approximately 45,000 (30,000 net) acres in the Eagle Ford, with an estimated 383 (255 net) un-risked drilling locations remaining, according to company officials. Goodrich entered the Eagle Ford early in 2010, paying approximately $1,650 per acre.

We’ll keep an eye out for any new details about Goodrich’s potential exit from the Eagle Ford. Stay abreast of all updates by subscribing to our newsletter.


Carrizo Acquires Eagle Ford Working Interest – $250-Million

Deal Includes 6,820 Net Acres in LaSalle, Atascosa, and McMullen Counties
Carrizo Eagle Ford Acreage Map

Carrizo Eagle Ford Acreage Map|Click to Enlarge

Houston-based Carrizo Oil & Gas, Inc., has closed its $250-million Eagle Ford acquisition of 6,820 net Eagle Ford acres from Eagle Ford Minerals, LLC, for $250-million. The deal represents a ~25% working interest* in the acquired properties, where Carrizo was already the operator. At closing, Carrizo assumed 100% of the working interest in the assets.

The acreage includes leaseholds and producing interests, and is located primarily in the oil window of the play, in LaSalle, Atascosa, and McMullen Counties. Net production from the acquired assets in the third-quarter was approximately 2,670 boe/d, with an 85% oil cut.

S.P. “Chip” Johnson, IV, Carrizo’s President and CEO, said, “while Carrizo has not historically been active in the acquisition of producing properties, we felt this was a perfect deal for the company. The acquisition adds an incremental 25% working interest in three of our four highest-return areas within the Eagle Ford Shale, and adds a significant amount of undrilled potential in addition to the existing production.”

The acquisition increases Carrizo’s Eagle Ford position to more than 81,000 net acres, and its drilling inventory in the play by 93 net wells to more than 915 net locations. At the end of September, Carrizo estimated net proved reserves associated with the acquisition to be 16.7 MMBoe (82% oil).

The transaction was completed on October 24, 2014, with an effective date of October 1, 2014. At closing, Carrizo paid approximately $93 million, with the remaining $150 million to be paid by February 2015.

Working Interest* – whosoever owns the working interest is liable for a portion of the ongoing costs associated with exploration, drilling and production. Working interest owner(s) also fully participate in the profits of any successful wells.


Statoil – Talisman Sale of Eagle Ford JV Tabled

Bloomberg: Companies Sought $4 Billion for 50-50 Partnership
Statoil and Talisman Eagle Ford Acreage Map

Statoil and Talisman Eagle Ford Acreage Map | Click to Enlarge

Talisman Energy Inc. and Statoil ASA have tabled plans to to sell their joint venture in the Eagle Ford Shale after offers came in lower than expected, Bloomberg reported in early July of 2014.

The companies were seeking around $4-billion for a 50-50 partnership, according to Bloomberg, which cited unidentified sources knowledgeable on the matter. Bids fell short in part because the venture produces especially light condensate, rather than crude oil, which commands more money, the article noted.

In June of 2013, our site reported (via Reuters) that Talisman Energy had retained the Royal Bank of Canada to determine if buyers were interested in the company’s Eagle Ford acreage. Talisman has approximately 70,000 net acres in the play according to a company spokesman.

Read more: Talisman Energy Shopping for Eagle Ford Buyers

Talisman said in March it plans to sell $2-billion of assets in 18 months to re-direct its focus on a smaller number of areas. In July of 2014, the company announced plans to unload its Australian operations.

Talisman and Statoil entered their joint venture in 2010. Last year, Statoil took over operations of the eastern portion of the JV. Statoil has approximately 73,000 net acres in the play.

Read more: Statoil – Talisman JV buys Enduring Resources Eagle Ford Acreage 

Recent Eagle Ford Deal Closings

Recently, several other notable deals have closed as early Eagle Ford players cashed out on their investments in South Texas. Encana closed its acquisition of ~45,000 net Eagle Ford acres from Freeport McMoran on June 20, 2014 for $3.1 billion. Sanchez Energy also closed its $639 million deal with Shell for 106,000 net Eagle Ford acres on June 30th. Earlier this year, Devon Energy closed on its $6 billion Eagle Ford acreage acquisition with Geo Southern.

Read more: Eagle Ford Deal Closings

Read more: Devon Banking on High Returns from Eagle Ford Investment

Hawkwood Energy Acquires East Texas Eagle Ford Acreage

Assets Located Primarily in Brazos and Robertson Counties
Brazos County Eagle Ford Shale Map

Brazos County, TX

Denver-based Hawkwood Energy, announced in early July of 2014 its entrance into the Eagle Ford with the acquisition of producing and non-producing assets in East Texas.

The deal includes 50,000 generally contiguous net undeveloped acres and approximately 1,800 b/d of current oil production, according to company officials. Development of the acquired assets has either targeted or will be prospective for the Eagle Ford Shale and Woodbine formations. The assets extend across Brazos, Leon, Madison and Robertson Counties.

Hawkwood acquired the assets in two separate transactions for undisclosed amounts from Crimson Energy Partners III and Encana Oil & Gas (USA) Inc. The deal with Crimson was mostly for acreage in Brazos County, and Encana’s assets included in the transaction were located primarily in Robertson County.

“We are excited about the growing unconventional activity in the Eagle Ford and Woodbine, as well as the other long term multi-pay opportunities the area has to offer,” said Hawkwood Energy CEO Patrick Oenbring.

Encana Divesting East Texas Assets

Encana has historically been a major industry player for natural gas production, but recently began selling many of its non-core assets to focus on liquids-rich shale fields. Some of those non-core assets were in East Texas, and in April of 2014, Encana announced the sale of approximately 90,000 net acres in Leon and Robertson Counties for $530 million. Company officials did not name a buyer for this transaction, and the deal is expected to close in the third quarter.

In June of 2014, Encana closed on its acquisition of 45,500 net acres in the oil window of the Eagle Ford in South Texas from Freeport-McMoran for $3.1 billion. This newly acquired acreage for Encana represents a new core area.

Read more: Encana Purchases Eagle Ford Assets from Freeport-McMoran – $3.1 Billion


Ares Management Buys Eagle Ford’s BlackBrush Oil & Gas

Deal Includes 160,000 Net Acres Across Dimmit, Frio, Karnes, La Salle, Maverick and McMullen Counties
BlackBrush EFS Acreage

BlackBrush Eagle Ford Acreage Map | Click to Enlarge

Private equity investor Ares Management LP announced in June of 2014 that it will purchase BlackBrush Oil & Gas, an independent Eagle Ford exploration and development company, for an undisclosed amount. The deal includes 160,000 net acres across Dimmit, Frio, Karnes, La Salle, Maverick and McMullen counties.

BlackBrush CEO Scott Martin will continue to lead the 75-employee San Antonio-based company. Co -founder Phil Mezey will also remain involved as an advisor.

“Partnering with the Ares private equity team provides us the capital to continue developing and growing our large asset base,” said Martin in a company statement.

Currently, BlackBrush operates over 300 oil and gas wells in South Texas. Estimates on the company’s website indicate 50-wells will be drilled over the next year targeting the Eagle Ford, Buda, Austin Chalk, San Miguel, Olmos and Pearsall Shale. With this transaction, more activity may occur inside of the company’s drilling target window.

The transaction is expected to close in the the third quarter of 2014.

Another Recent Eagle Ford Transaction Has Ties to BlackBrush Leadership

In June of 2014, Dallas-based Southcross Energy announced it was acquiring San Antonio-based pipeline company TexStar Midstream Services, LP. for $450 million. TexStar was also led by BlackBrush’s Martin and Mezey.

The deal includes 3,700 miles of pipeline, four processing plants and three fractionation facilities in the Eagle Ford Shale area. After the transaction closes, a newly formed company, Southcross Holdings LP (“Holdings”) will own 100% of the general partner of Southcross and equity interests in Southcross as well as former TexStar assets.


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

Acquired Acreage Has Current Production of ~1,200 Net boe/d in Live Oak, Atascosa and Karnes Counties
ConocoPhillips Eagle Ford Map

ConocoPhillips Eagle Ford Map | Click to Enlarge

Oklahoma-based Warwick Energy announced in June of 2014 that the company closed its purchase of R/C Sugarkane LLC, an Eagle Ford upstream oil and gas company, last month.

At closing, Warwick Energy gained R/C Sugarkane’s 7,300 net Eagle Ford acres, with current production of ~1,200 net boe/d in Live Oak, Atascosa and Karnes counties. The deal also included R/C Sugarkane’s gathering and other related midstream infrastructure in the play. In April of 2014, Warwick announced it agreed to purchase R/C Sugarkane from affiliates of a New York-based private equity firm, Riverstone Holdings LLC, for an undisclosed amount.

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

According to Warwick officials, the operators of the acquired acreage are ConocoPhillips, Marathon and BHP Billiton. Warwick officials say they are encouraged by downspacing results and optimizations being achieved by these operators.

Warwick CEO Katherine Richard, said in a company statement, “the Eagle Ford Shale is a world class, liquids-rich resource play and through this acquisition we have acquired a multi-year drilling inventory that is both substantially de-risked and held by production.

Warwick was founded in 2010, and manages non-operated oil and gas interests across the country, with interests in over 5,000 wells in 13 states. The R/C Sugarkane acquisition will be funded by ArcLight Capital Partners affiliated equity investors.