Cool: Magnum Hunter Sells Eagle Ford Assets to Penn Virgina; $20,000/Acre -- Proven Production

Rigzone is reporting:

Penn Virginia Corp. has offered $400 million to Magnum Hunter Resources Corp. to acquire the company’s producing properties and undeveloped leasehold interests in the Eagle Ford Shale play in Texas.

Under the deal, Penn Virginia will acquire about 19,000 net mineral acres in Gonzales and Lavaca Counties, Texas which are located adjacent to the company’s current position in both counties. As a result, Penn will own roughly 83,000 gross acres of the Eagle Ford Shale and will increase their drilling inventory by 345 locations, for a total of 640 drilling locations, the company noted in a press release.

From the press release:

The assets include 46 producing wells which will increase its count to 117 wells. Seven wells are in the process of being completed or awaiting completion and four wells are being drilled on the acquired acreage. The company stated it plans to drill up to 62 Eagle Ford Shale wells during 2013.

And,

The total consideration for this transaction will be paid approximately 90 percent or $361 million in cash and, at the option of Penn Virginia, the remaining 10 percent or $40 million either in cash or Penn Virginia shares valued at $4 per share, said Magnum Hunter in a released statement.

Quick, back of the envelope: $400 million / 19,000 acres = $20,000 / acre. Okay.

19,000 new net acres. 345 new drilling locations. 19,000 / 640 acres = 30 sections. 345 new locations / 30 sections = 11 wells / section. For newbies, the good Bakken is getting about 4 - 6 wells / section. Okay.

Going through the blog, it appears that Penn Virginia left the Bakken shortly after 2010, though it did transfer some acreage to Anschutz in 2012.