Eagle Ford Shale

SM Energy Sells Part Of Non Operated Eagle Ford Shale Position

SM Energy (SM) reported that it has signed an agreement to sell a 12.5% working interest in the company’s non operated position in the Eagle Ford Shale to Mitsui & Co., Ltd. for $680 million.

SM Energy said that the $680 million will be paid to the company through a drilling carry where Mitsui & Co., Ltd. will pay 90% of its future drilling and completion costs in the Eagle Ford Shale.  The company will also be reimbursed between $20 million and $40 million for the purchaser’s share of capital expenditures from 3/1/2011 and the closing date.

After the deal closes, SM Energy will have 46,000 net non operated acres in the Eagle Ford Shale.  The company reported average daily production of 43.5 million cubic feet of natural gas equivalents from its non operated leasehold as of 3/31/2011.  This production was 42% oil, 36% natural gas and 22% natural gas liquids.  Proved reserves totaled 52 billion cubic feet of natural gas liquids.

SM Energy Sells Eagle Ford Shale Acreage

SM Energy (SM) signed an agreement to sell part of its acreage in Texas that is prospective for the Eagle Ford Shale. 

SM Energy is selling 15,400 net acres for $225 million, or $14,610 per acre. The acreage is located mostly in LaSalle County, Texas. The acreage has three drilled wells but no current production.  

SM Energy said that the sale would close in August 2011 and that the company is looking for further buyers for its acreage in the Eagle Ford shale.

Carrizo Oil and Gas Acquires Additional Eagle Ford Shale Acreage

Carrizo Oil and Gas (CRZO) announced the acquisition of 13,000 net acres of leasehold in Texas that is prospective for the Eagle Ford Shale.  This brings the company’s total exposure to 33,000 net acres.

Carrizo Oil and Gas said that the acquired acreage is in the condensate area of the Eagle Ford Shale in La Salle County, Texas. The company said that the upfront cash cost will be $21.45 million or $1,650 per acre and the total cost including the future drilling carry will “fall below $5,500 per acre on a present value basis.”

Carrizo Oil and Gas is moving an additional rig into the Eagle Ford Shale to help develop the additional acreage, bringing its operated rig count in the play to three.  This rig will start drilling the Ivey Ranch 10H well in Dimmit County.

Carrizo Oil and Gas is not raising its production guidance yet until the company can finalize and contract for additional hydraulic fracturing capacity in the Eagle Ford Shale.