Borrowing base — Eagle Ford Shale News

Houston-based Alta Mesa LP, an Eagle Ford player with acreage in Karnes, Goliad and DeWitt Counties, announced an increase in its borrowing base from $350-million to $375-million this week. Alta Mesa's credit facility is provided by a syndicate of ten banks agented by Wells Fargo Bank, N.A. and co-agented by Union Bank, N.A.

Alta Mesa Recent Eagle Ford Divestiture

Alta Mesa entered the Eagle Ford in 2010 with its acquisition of the Eagleville Field from Meridian Resources Corp. Alta Mesa also has interest across East Texas, South Louisiana and the Sooner trend in Oklahoma.

In the first quarter of this year, Alta Mesa sold some its interests in the Eagleville Field to Memorial Production Partners in a $173 million deal, divesting 15,200 (800 net) acres in Karnes County.

Alta Mesa Q3 Eagle Ford Operations

During the third-quarter, Alta Mesa's Eagle Ford production dropped 400 boe/d in the Eagle Ford quarter-over-quarter to 3,000 boe/d. Company officials cited the partial Eagleville divestiture during the first-quarter as the primary reason for the drop in the company's most recent operations update released this week.

Alta Mesa is focused on downspacing and increasing its operational efficiencies in the Eagle Ford. Currently, staggered 20 acre downspacing is being tested. Company officials say that could add ~3 years of additional drilling in the Upper Eagle Ford at the company's current 2 rig pace. As of November of 2014, Alta Mesa expects to place four additional 20-acre Upper Eagle Ford Shale staggered spaced wells online. In 2014, the company's capital expenditures are expected to total $50-million in the Eagle Ford.

Read more at altamesa.net

SM Energy's Eagle Ford production grew to 230 mmcfe/d in July. That's up more than 10% from the second quarter when the company produced 207 mmcfe/d. The company is also adding tank batteries this month that will allow for continued growth from the play. SM has been plagued by downstream pipeline curtailments and delays in receiving equipment. Due to the delays, much of the company's production growth will be weighted toward the end of the year. As of mid-year, the company had completed 26 wells and plans to complete 41 in the second half of 2012.

“The operated Eagle Ford program is central to the Company’s plans to grow corporate production by 25% in 2012. I am pleased with the program’s progress and believe that it will help us meet our production goals for the year. I am also happy to see the increase in our borrowing base despite a challenging commodity price environment for natural gas and NGLs, as it is a reflection of the quality of SM Energy’s reserve base.”