Panhandle Oil and Gas Acquires Interest in Eagle Ford Acreage for $80 Million

Eagle Ford Satellite Image
Eagle Ford Satellite Image

In May of 2014, Oklahoma City-based Panhandle Oil & Gas Inc. signed an agreement with private sellers to acquire a 16% non-operated working interest in 11,100 gross Eagle Ford acres (1,775 net) for just over $80-million.

The properties are located in the core Eagle Ford oil window in La Salle and Frio counties.

The acreage block is held by production, with 52 Eagle Ford wells producing, and six awaiting completion. Five Pearsall wells and one Buda Limestone well are also producing. According to the company, the entire acreage has a drilling inventory of 113 undeveloped Eagle Ford locations.

We are very pleased to be in a position to add this package of properties in the Eagle Ford Shale to Panhandle’s asset base. These properties produced an average of 733 net equivalent barrels of oil per day (80% oil, 10% NGL and 10% natural gas) during the first calendar quarter of 2014. Production volumes included two new Eagle Ford wells, which only produced the last 15 days of the quarter at a combined rate of 1,166 boe/d gross or 139 boe/d net. Another six new Eagle Ford wells have been drilled and are expected to begin producing this month at a first 30-day average gross rate of approximately 500 boe/day per well or a total of approximately 350 boe/day of additional net production. This transaction will significantly increase Panhandle’s current oil production, which is approximately 720 bbl/d.
— Panhandle CEO, Michael Coffman

Panhandle estimates net proved developed reserves are approximately 1.72-million bbls oil, 1.73-million mcf gas and 297,000 bbls NGLs.  Reserves for the 113 undeveloped locations, which are projected to have an average effective lateral length of approximately 7000', are estimated to be 5.57-million bbls oil, 4.58-million mcf of gas and 789,000 bbls NGLs.

Currently, the property is being developed with a one drilling rig program. The operator is Oklahoma City-based Cheyenne Petroleum Company.

The transaction is projected to close by mid-June of 2014, with an effective date of April 1, 2014.