Repsol Moves into the Eagle Ford

Repsol Acquires Talisman
Repsol Acquires Talisman

Repsol completed its acquisition of Talisman Energy last month and became one of the largest companies in the energy sector worldwide.

Related: Talisman Energy Cuts Jobs

The deal brings Repsol into the Eagle Ford and allows them to gain 59,000 net acres of south Texas land. It is still unclear how this merger will affect those Eagle Ford shale operations. In a conference call on May 10th, Repsol said that Talisman’s assets had been consolidated into its upstream division, but they were not ready to reveal further details about their plans.

The announcement comes days after Talisman released strong first quarter results.

Talisman delivered solid operational and financial results in the first quarter of 2015 against a backdrop of significantly lower commodity prices and our strategic decision to cut capital investment,’ said Hal Kvisle, President and CEO. ‘Production from ongoing operations averaged 360,000 boe/d in the quarter, up slightly from the first quarter of 2014, and cash flow(1) was $605 million for the quarter, supported in large part by hedging settlements.

First Quarter Highlights:

  • Production averaged 360,000 boe/d in the first quarter of 2015, up 2% from the first quarter of 2014.
  • Cash flow was $605 million, up 19% from the previous quarter
  • Capital spending was $436 million, down 48% from last quarter and 43% from the first quarter of 2014
  • Operating cost was $439 million, down 17% from the previous quarter and 15% from the first quarter of 2014.


Noble Energy Plans Expansion into Eagle Ford

Rosetta-Noble Merger
Rosetta-Noble Merger

Houston-based Noble Energy announced Monday it plans to get into the shale business by acquiring independent producer, Rosetta Resources. The $2.1 billion deal will allow Noble to move into over 100,000 Texas acres including 50,000 in the Eagle Ford.

After months of instability due to low and fluctuating crude prices, this deal is significant because it reveals a renewed confidence in the industry and the tenacity and resilience of U.S. producers. Many also believe it may be a tipping point for future mergers.

It is possible the merger of these two shale drillers will ultimately aid a rebound in oil prices. For now, though, it demonstrates the exploration-and-production sector’s ability to keep going in adverse conditions.
— The Wall Street Journal

Rosetta is a leading producer in the The Eagle Ford and reported 2015 Q1 production at 58.4 MBoe/d, a 17% increase from the same period last year.  Also during the quarter, the company spent $67.8 million for drilling and completion activity: they drilled three wells were drilled, 14 completed and 11 were brought on production.

I am excited to announce this strategic transaction which adds two exceptional and material areas to our global portfolio. The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S., which will expand our resource base and development inventory and further diversify our portfolio.
— Dave Stover, Noble Energy's Chairman, CEO, and President

Sabine Oil & Gas Merger with Forest Oil Corporation

Forest Oil Eagle Ford Acreage Map Year-end 2013
Forest Oil Eagle Ford Acreage Map Year-end 2013

Houston-based Sabine Oil and Gas and Denver-based Forest Oil Corp will merge in an all-stock transaction.

At closing, which is expected some time during the fourth quarter, Sabine investors will hold 73.5% of the combined company's stock. The announcement of the merger was revealed by both companies in early May of 2014.

Forest’s asset portfolio is an excellent complement with Sabine’s asset portfolio and we have confidence that Sabine’s management team is equipped to deliver exceptional shareholder value through the enhanced opportunities that are embedded in Forest’s assets.
— Forest CEO, Patrick McDonald

The combined company, which is expected to be listed on the NYSE as "SABO", will hold a 207,000 net acreage position in East Texas, and a 65,000 net acreage position in the Eagle Ford. Estimated proved reserves from the combined company's assets are 1.5 trillion cubic feet equivalent (71% gas) (as of December 31, 2013), and estimated daily production of 345 million cubic feet equivalent (65% gas) for 2014.

Forest Oil Was in Trouble

The merger comes on the heels of multiple asset divestitures by Forest over the past several years. In early January of 2013, the company sold some of its South Texas assets to pay down debt.

Read more: Forest Oil Sells South Texas Assets

Recently, Forest Oil hit a snag in the Eagle Ford during the fourth quarter of 2013, after three gross (1.5 net) wells hit a fault line in the company’s southern acreage. 77% of the company’s $290-310 million capital budget was slated for the Eagle Ford in 2014, but new estimates were set at 36% after problems arose.

Read more: Forest Oil Eagle Ford Drilling Shifting Gears in 2014 Due to Faulting

The new company's headquarters will be based in Houston, TX, and led by Sabine's current executive management. Prior to the merger, Sabine Oil and Gas was a privately held company.


ZaZa Energy - Toreador Resources Merge

ZaZa Energy and Toreador Resources have agreed to a merger that will create a new public company that will trade on the NASDAQ under the symbol ZAZA. This is an interesting merger in that both companies are rumored to have joint venture agreements with Hess - ZaZa on its Eagle Ford acreage and Toreador on its Paris Basin acreage. The new ZaZa will bring the two partnerships under one roof. ZaZa's Eagle Ford Shale properties will provide a drilling inventory that gives the new company time to fully assess Toreador's Paris Basin assets. The French aren't real excited about hydraulic fracturing and the current fracking ban makes drilling in the Liassic shale more of a question than a plan. 

Toreador Resources Corporation (NASDAQ:TRGL) (Paris: TOR) (“Toreador”) and ZaZa Energy, LLC (“ZaZa”), a privately held oil and gas company based in Houston, Texas, today announced that on August 9, 2011, they signed a definitive agreement to combine the companies. The combined portfolio comprises three areas – the Eagle Ford core and the emerging Eagle Ford/Woodbine (“Eaglebine”) resource plays in Texas and the Paris Basin in France with a current total of 423,000 net acres. Both the Eagle Ford and Paris Basin businesses have strategic partnerships with subsidiaries of Hess Corporation. Based on the closing share price of Toreador on Tuesday, August 9, 2011, the implied market capitalization for the combined company is approximately $294 million

In the Eagle Ford core, ZaZa holds 123,000 gross acres; the joint venture work program forecasts over 280 wells drilled by the end of 2013. In the Eaglebine, leasing is underway to expand the existing 70,000 gross acres to over 100,000 gross acres within the next 12 months. ZaZa has been in discussions with potential joint venture partners for the Eaglebine acreage and plans to spud a first well by the first quarter of 2012