Wednesday, May 21, 2014

Sanchez Acquires Additional Eagle Ford Acreage; $6,000/Acre (De-Risked/Producing); XTO To Acquire 26,000 Additional Acres In The Permian

It seems I've read this before, possibly even posted it earlier. Whatever. Rigzone is reporting:
Royal Dutch Shell plc will sell to Sanchez Energy Corp. its interest in Eagle Ford shale assets as the company refocuses its North American portfolio on acreage where it can reach the scale it needs to successfully execute projects.
Houston-based Sanchez will acquire Shell’s 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb counties in south Texas, which includes approximately 176 operated producing wells and associated field facilities and infrastructure.
The assets include 60 million barrels of oil equivalent of proved reserves. Net production from this acreage in first quarter 2014 was approximately 24,000 barrels of oil equivalent per day (boepd); around 60 percent of this production was crude and natural gas liquids. The acquisition will boost Sanchez’s position in the Eagle Ford to around 226,000 acres, with up to 3,000 potential drilling locations and average first quarter 2014 pro forma production of about 42,800 boepd, Sanchez said in a May 21 press statement.
The pro forma potential drilling locations of nearly 3,000 wells include 200 identified low-risk and high rate of return drilling locations and up to 800 additional potential locations.
I don't think the Rigzone article mentions the price (I may have missed it) but FuelFix says it was a $639 million deal for 106,000 de-risked/producing acres. BOTPE: $639 million / 106,000 acres = $6,000/acre.  

A bit more about Shell's re-focusing:
Shell has previously divested its acreage position in the Mississippi Lime play in Kansas, its position in Ohio’s Utica shale and part of its acreage in Colorado’s Sandwash Niobrara basins.

Meanwhile, Rigzone is also reporting that in an exchange deal, XOM/XTO will add 26,000 acres to its North American portfolio:
Exxon Mobil Corporation announced Wednesday that it has executed an agreement to add nearly 26,000 acres to its U.S. oil and natural gas portfolio managed by subsidiary XTO Energy Inc., through a non-monetary exchange with LINN Energy, LLC. Virtually all of the acreage is located within the portion of the Midland Basin that is most prospective for horizontal Wolfcamp and Spraberry development. In exchange, LINN Energy will receive a portion of XTO’s interest in the Hugoton gas field in Kansas and Oklahoma.

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