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.

U.S. Energy Corp. And Crimson Exploration Enter Joint Venture Agreement In The Eagle Ford Shale

U.S. Energy Corp. (USEG) entered into a joint venture agreement with Crimson Exploration (CXPO) to develop acreage prospective for the Eagle Ford Shale in Texas.

U.S. Energy Corp. can earn up to a 30% working interest in 4,675 gross acres or 1,402.5 net acres, all of which is located in Zavala County, Texas.   The company agreed to pay a cash fee up front and a future drilling carry on the Eagle Ford Shale acreage.

U.S. Energy Corp. said that the first well will be drilled in the second quarter of 2011, and the results of this well will be evaluated to determine a 2012 development program.  The company estimates that it has 26 gross or 7.8 net Eagle Ford Shale drilling locations on the acreage.

Magnum Hunter Resources Reports Completion Of The Southern Hunter #1-H Well In The Eagle Ford Shale

Magnum Hunter Resources (MHR) updated the status of the Southern Hunter #1-H, a well recently completed into the Eagle Ford Shale in Gonzales County, Texas.

The Southern Hunter #1-H well was started in October 2010 and drilled to a vertical depth of 11,779 feet, and with a 4,460 foot horizontal lateral.  This Eagle Ford Shale well was completed with a fourteen stage hydraulic fracturing operation, and is currently producing 1,225 barrels of oil equivalent (BOE) per day, along with 212 barrels per day of water.

Magnum Hunter Resources estimates that the Southern Hunter #1-H well will have an estimated ultimate recovery (EUR) of 500,000 BOE.  The company is the operator of the well and owns a 50% working interest in this Eagle Ford Shale well.