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

Alta Mesa Eagle Ford Acreage Map
Alta Mesa Eagle Ford Acreage Map

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.

Read moreMurphy Oil's Eagle Ford Production Grows to 39,000 boe/d in 2013

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.


Murphy Oil's Eagle Ford Production Grows to 39,000 boe/d in 2013

Murphy Eagle Ford Production
Murphy Eagle Ford Production

In 2013, Murphy Oil originally planned Eagle Ford production of ~30,000 boe/d, but the company blew through that goal and produced an average of 39,000 boe/d for the year.

Also read:Murphy Oil's Eagle Ford Production Hits Milestone

Murphy's fourth quarter total oil production rose from 132,918 b/d in 2012 to 139,660 b/d in 2013 or an increase of 5%. The Eagle Ford was the primary contributor to oil production growth.

The company's average oil production was 135,078 b/d in 2013, an increase of ~20% compared to the 2012 level of 112,591 b/d.

In 2013, we continued to grow production led by our onshore Eagle Ford Shale operation, where total production averaged 39,000 net barrels of oil equivalent per day for the year.
— Murphy's President, Roger Jenkins

With oil production growth of 20%, it's easy to see the significant impact oil plays like the Eagle Ford.

Murphy Oil at a Glance in 2013

  • Significant Production Growth in Eagle Ford in 2013
  • 39,000 net boe/d in Eagle Ford in 2013
  • ~5% Q4 oil production increase to 139,660 b/d
  • ~20% total year oil production increase to 135,078 b/d

Murphy Oil's Eagle Ford Production in 2013

Murphy has outperformed in the Eagle Ford. At the beginning of 2013, the company had a target of 30,000 boe/d in the formation.

The company's Eagle Ford production in 2013 well surpassed its goal, hitting 39,000 boe/d. That's 30% higher than the company planned.

Murphy now expects to surpass 60,000 boe/d at some point in 2015.


Murphy Oil's Liquids Production Grows 30% - Thanks To The Eagle Ford

Murphy Oil Eagle Ford Production Chart
Murphy Oil Eagle Ford Production Chart

Murphy Oil produced over 204,000 boe/d in the second quarter and 135,000 b/d of production was attributable to oil & gas liquids. The liquids volume reported represents growth of more than 30% from the same period in 2012. It should be no surprise the company attributes much of its growth to the Eagle Ford.

Murphy estimates the Eagle Ford will account for a little less than 40,000 boe/d in 2013 and production could ultimately rise to as much as 100,000 boe/d over the next five years.

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The increase in oil production in 2013 was primarily attributable to higher production in the Eagle Ford Shale area, where significant development drilling and completion operations are ongoing.

Murphy Oil's Eagle Ford Drilling & Completion Costs Falling

[ic-l]Murphy reports improving costs in both the drilling and completion of Eagle Ford wells. Drilling costs per foot have fallen from $291 in 2010 to $169 (down 42%) in the first quarter of 2013. Simlarly, completion costs per lateral foot have fallen from $1,210 to $763 (down 35%) during the past three years.

Murphy's operating costs in the Eagle Ford have fallen from ~$35/boe to a little more than $20/boe today. The company expects operating costs will fall to approximately $15/boe by 2015.

Murphy Oil is in the process of spinning off its U.S. Retail business into a new company names Murphy USA. Murphy Oil will be a pure play E&P company when the transaction is completed at the end of August.

Read the full Q2 press release at

Murphy Oil's Eagle Ford Production Hits Milestone

Murphy Oil Eagle Ford Production
Murphy Oil Eagle Ford Production

Murphy Oil surpassed 25,000 boe/d at the end of 2012 and annualized production averaged 15,000 boe/d. With an exit rate above 25,000 boe/d, the company is in a nice position to meet or exceed its production target of 30,000 boe/d in 2013.

Murphy is working 10 rigs and three frack crews around the clock. The company has drilled 216 wells to date and has brought 163 to production. Total time spent to drill and case wells is averaging 11-13 days across the play.

Most of the crude the company produces is moved by truck (86%) -

Roger Jenkins, COO stated "There's many places to unload the trucks, many depots, many options. We're doing very well with our crude. Murphy's land situation is not a condensate one. For black oil, 41, 42 degree API, we've been getting a $13 positive margin to WTI there for some time. And people want our crude in that area and we're doing very well with the marketing quality of crude because we have very little condensate in our business."

The company will continue to push downspacing to 80-acres across all three areas operated in the Eagle Ford. Testing down to as little as 40-acres per well might take place late in 2013.

Watch for test results from the company's first Pearsall Shale well near the end of the first quarter of 2013. Two horizontal Pearsall wells are planned in Atascosa County in the first half of the year.

Expect to see operational costs come down as the company begins drilling four wells from each pad. Pad drilling will allow for the Murphy to allocate facilities in a more efficient manner.