Leases — Eagle Ford Shale News — Eagle Ford Shale Play

Horizon Energy Corporation announced in early April that it signed an option agreement for an oil and gas lease in Webb County, TX. The land consists of 1,340 acres located close to Mirando City.

Webb County is in the dry gas window of the Eagle Ford Shale, and also produces oil and gas from the Lobo and Wilcox formations. Horizon, formerly Solar America Corp., did not divulge any of the agreement's terms.

“We are actively evaluating this and other acquisition opportunities of oil and gas properties that are a match with our strategy,” said Robert Bludorn, President and CEO of Horizon Energy Corporation. He added, “We are encouraged by the deal flow we are identifying that has the potential to allow us to build our company with quality assets.”

SM Energy and Lewis Energy are the largest operators with production focused in the Eagle Ford shale in Webb County. Other top operators with active leases in the area include Chevron, ConocoPhillips and Swift Energy.

In March of 2014, Swift Energy tested three Eagle Ford wells in the Fasken area of Webb County, with average initial production (IP) rates of 22.1 mmcf/d. The Company has identified an additional 50-60 undeveloped lower Eagle Ford locations in the Fasken area.

Click Here to read the Horizon press release

Activity across the Eagle Ford has held at a fever pitch for more than a year now. Many operators have improved drilling times and scaled back the number of rigs be utilized, but they're still drilling the same number of wells. Other operators are stepping in to pickup additional rigs and we've seen very little change in the rig count overall. Approximately 270 rigs have been running in the region for almost 12 months.

“You have to drill a well to hold acreage,” said Tudor, who spoke at a media tour hosted by BHP Billiton Petroleum this month. “There's a lot of that in America.”

Many Eagle Ford leases were negotiated between 2008 and 2010. A typical lease has a primary term of 3-5 years. If a well isn't producing before the 3-5 years is up, the landowner has the right to lease the mineral rights again. Operators are drilling wells across the play to make sure leases are held by production before expiration. A well drilled before expiration of the primary term will save operators the cost of additional lease bonuses and potentially higher royalties. It could mean millions of dollars per well.

Read more from Jennifer Hiller at mysa.com