Cardinal Energy Group Acquires 2,800 Net Eagle Ford Acres

July 16, 2014 Kirk Eggleston

Dublin, OH-based Cardinal Energy Group is buying 2,800 net Eagle Ford acres from Hamburg Germany-based Nordic Oil USA 1 LLLP for an undisclosed amount of money.

The acreage is located in Gonzales and Wilson Counties in the oil and liquids-rich window of the play. The acquisition will include operating interests in ten producing wells and one salt water disposal well. The deal also secures production equipment, leases and drilling permits plus other assets needed to operate the wells.

“We have been diligently looking for an entry into the Eagle Ford Shale formation for the past year.”

— Cardinal CEO, Timothy Crawford

According to officials, the newly acquired oil and gas properties are currently producing from the Anacacho and Austin Chalk formations, and also include deep rights in approximately 1,500 net acres, for development of the Eagle Ford Shale and Buda formations. Officials also say other companies operating adjacent and in proximity to this acreage have horizontal wells coming in at 3,000 to 4,000 b/d oil. During the first quarter, EOG Resources, a major Eagle Ford producer, revealed strong initial production rates for two of its Gonzales County wells of 4,940 and 4,195 b/d oil.

According to its company website, Cardinal's focus is on reclaiming reserves from abandoned or minimally producing oilfields. The company indicates their primary focus is on Texas. Currently, there are 47,000 inactive and “orphan” wells in the state, according to the Texas Railroad Commission.

Penn Virginia Acquires Eagle Ford Acreage - $45 Million

July 15, 2014 Kirk Eggleston

Penn Virginia Corp. announced in July of 2014 that it will acquire ~13,125 (11,660 net) Eagle Ford acres in Lavaca County, TX for $45-million.

The transaction will bring the company's total Eagle Ford position to 142,500 (101,800 net) acres. The newly acquired assets are located next to the company's Shiner area. Officials estimate ~150 gross potential drilling locations from the acquired acreage, most of which will be prospective for the Upper Eagle Ford Shale.

Recently, Penn-Virginia stated it planned to further expand its Eagle Ford position to a minimum of 100,000 net acres. With this most recent acquisition, the company will reach its target goal.

“This acquisition is an optimal fit with our current acreage position in Lavaca County, and we believe is primarily prospective in the Upper Eagle Ford Shale, but could also have potential in the Lower Eagle Ford Shale and Austin Chalk.”

— Penn Virginia CEO, H. Baird Whitehead.

Penn-Virginia has been growing aggressively in the Eagle Ford. During the first quarter alone, the company added 6,400 net acres at a cost of $3,000 per acre.

Closing for the recently acquired Lavaca County acreage will be in August of 2014.

Eagle Ford Deal Closings - June 2014

July 1, 2014 Kirk Eggleston

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

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

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.

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.

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

Sundance Energy Acquires 11,000 Net Eagle Ford Acres for $33-Million

May 27, 2014 Kirk Eggleston

In late May of 2014, Australian-based Sundance Energy announced the acquisition of 11,000 net acres in Dimmit and Maverick counties for $33-million and a four gross Eagle Ford well drilling commitment to the seller. The deal adds 115 gross (69 net) locations to the company's Eagle Ford drilling inventory and approximately 200 boe/d in production. Sundance now has approximately 19,500 net Eagle Ford acres covering 295 gross (196 net) drilling locations.

This acquisition is the company's second strategic move to add Eagle Ford acreage to its portfolio in just over a month's time. In late April 2014, the company announced the completion of a lease acquisition and development agreement for Eagle Ford acreage in McMullen County. That deal added 4,800 net acres and 50 gross locations to the Sundance’s Eagle Ford drilling inventory.

Sundance Building a Core Eagle Ford Operating Area

In late May of 2014, Sundance also announced the sale of its acreage in the DJ Basin in Colorado for $116-million. The company is shifting its assets to build a core operating area in the Eagle Ford, and a portion of the funds from this sale will be re-allocated to the play.

“This sale of a non-core project allows the company to not only crystalise an attractive return on its DJ Basin investment, but provides a significant opportunity to reinvest capital into accelerating growth in our core projects in the Eagle Ford and Mississippian/Woodford.”

— Sundance's Managing Dir., Eric McCrady

undance's most recent acquisition in Dimmit County is for a 60% working interest, and a 30% working interest in the Maverick County acreage. Dimmit County wells are prospective for the Eagle Ford formation, while the Maverick County wells are targeting the Georgetown formation.

“We are very excited to add a second core Eagle Ford area to our development inventory. Dimmit County has seen significant activity and strong results from some of the leading Eagle Ford operators such as Anadarko.”

— McCrady

In the purchase and sale agreement, Sundance secured an option to buy the remaining 40% interest in the Dimmit County acreage, and an additional 20% interest in the Maverick County acreage. Sundance did not disclose any information about the seller. Closing is expected in late June or early July of 2014.

Memorial Production Partners Buys Eagle Ford Assets in $173 Million Deal

March 27, 2014 Kirk Eggleston

Memorial Production Partners announced in March 2014 that it purchased Eagle Ford assets from Alta Mesa Holdings for $173 million. The deal includes 15,200 (800 net) acres in Karnes County, with 99-percent of the assets already held by production.

According to company officials, Memorial will gain an interest in 117 non-operated wells, with average net production of 1,650 boe/d. Approximately 80-percent of current production is oil.

Additionally, Memorial is acquiring a 30-percent interest in Alta Mesa's Eagle Ford leasehold, which includes an interest in over 180 gross and 9 net proved developed non-producing and proven undeveloped locations. Murphy Oil Corporation is the primary operator of the acquired properties.

“This acquisition is consistent with our strategy of acquiring reserves in proven basins with long lives and high margins. Further, this acquisition provides an entrance into one of the country’s premier resource plays in a structure appropriate for an MLP and an opportunity to partner alongside a top operator like Murphy Oil.”

— Murphy Oil CEO, John Weinzierl

Murphy Oil Company continues to grow steadily in the Eagle Ford. At the end of 2013, the company grew production in the play to 39,000 boe/d in the play.

Memorial and Alta Mesa are both based in Houston, TX. Alta Mesa began acquiring assets in Karnes County in 2010, and will retain a 50-percent net profits interest in the proved developed producing wells included in the sale as of January 1, 2014. At year-end 2014, 2015 and 2016, the net profits interest will automatically reduce to 30-percent, 15-percent and 0-percent, respectively.