Carrizo Buys More Eagle Ford Acres
Carrizo strengthens its position in the Eagle Ford through a $181 million deal with Sanchez.
Related: Carrizo Seeks Co-investor for Eagle Ford Deals
Earlier this week, Carrizo Oil & Gas, Inc. announced it has signed an agreement to acquire 15,000 acres in the heart of the Eagle Ford from Sanchez Energy Corporation.
Acquisition highlights include:
- Approximately 15,000 net acres located in LaSalle, Frio, and McMullen counties, TX
- Estimated net production during September of approximately 3,100 Boe/d (61% oil) from 112 gross (93 net) wells
- Net proved reserves estimated at 14.5 MMBoe (71% oil, 56% developed)
- Approximately 80 net de-risked drilling locations based on a single layer development in the Lower Eagle Ford Shale, with additional upside potential from stagger-stack development, infill drilling, and additional zones
- Acreage is 100% operated with no additional drilling requirements
In September, Carrizo announced they were increasing capital expenditures for the Eagle Ford and looking for additional opportunities to increase their holdings in the region.
After the closing in December 2016, Carrizo will hold over 100,000 net acres in the Eagle Ford Shale, concentrated in LaSalle, McMullen, and Atascosa counties. The acquisition also increases Carrizo’s drilling inventory in the play to approximately 1,100 net locations.
The transaction has an effective date of June 1, 2016, and is currently expected to close by mid-December, 2016. Carrizo plans to fund the acquisition with the proceeds from a separately-announced equity financing.
“We are pleased to announce this bolt-on acquisition in the Eagle Ford Shale, as it increases our acreage position in the play by more than 15% and expands our Core inventory in it by approximately 10%, with additional upside possible from a combination of infill drilling and multi-zone development. ”
In the same press release, the company also estimated 2016 third quarter production volumes of 3,750 MBoe, or 40,762 Boe/d, an increase of 13% versus the third quarter of 2015. Oil production during the third quarter of 2016 averaged 24,488 Bbls/d, while natural gas and NGL production averaged 69,262 Mcf/d and 4,730 Bbls/d, respectively.
Carrizzo credits high volumes to stronger-than-expected performance from the company’s Eagle Ford Shale and Delaware Basin assets.