Did Devon Pay As Much As $60,000/Acre In The Eagle Ford? If So, The Bakken Is Way, Way Undervalued

I posted this just a few minutes earlier: record paid for Eagle Ford shale -- Richard Zeits over at SeekingAlpha.

The per-acre valuation is a blended average for the higher-valued DeWitt County leases, which are located in the play's most productive sweet spot, and relatively lower valued Lavaca County acreage. Taking the value differences into account, the per-acre valuation attributable to the DeWitt County acreage exceeds $60,000 per undeveloped acre. The price is a new record in the play and is particularly high given that the acquired properties are mostly non-operated (BHP Billiton is the operator in DeWitt County).

Devon indicated that there are approximately 1,200 drilling locations remaining on the properties. This implies a price of ~$2.7-$3.2 million per remaining drilling location. Assuming that the properties will be fully developed in about five-six years, the acquisition price, including a 10% annual cost of carry on undeveloped acreage, translates into approximately $3.5-$4.0 million average add-on to the already high $9-$10 million total well cost. The acquisition burden is, obviously, quite significant and negates a significant portion of what otherwise should be very strong drilling returns.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or what you think you may have read here, but this story certainly reassures me that my recent investments in operators working in the various shale plays across the US was not ill-placed. Wow, $60,000/acre.