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 ogfj.com