Hess To Sell Some Eagle Ford Assets to Sanchez

Updates

March 20, 2013: Hess activists are unhappy with the sale.

Original Post

Rigzone is reporting:

Hess Corp. has agreed to sell assets in the Eagle Ford shale in south Texas for $265 million to Sanchez Energy Corp. as it continues to whittle its operations.

The deal includes around 43,000 acres in the Eagle Ford shale in Dimmit, Frio, LaSalle and Zavala Counties, and was effective March 1.

The deal comes as Hess has been selling assets to fund drilling and exploration concerns and reduce costs, and amid shareholder pressure to focus its operations.

The transaction is expected to boost the smaller oil and gas explorer Sanchez' production by around 4,500 barrels of oil equivalent a day, more than doubling its production from its rate of 3,800 boe in the first two months of 2013. The acquisition also increases Sanchez' total proved reserves by 13.4 million boe, and increases its proved developed reserves by around 6.6 million boe. It adds 50 wells, for a total count of 84 producing wells.

$265 million/43,000 acres = $6,000/acre minus current production.

One story line: Hess sold Eagle Ford acreage, not Bakken acreage.