Eagle Ford News Pulse July 2021

Posted: August 18, 2021

Eagle Ford Basin | July 2021

Field Overview

A heavy shale play, the Eagle Ford basin is located east of the Permian, stretching from Dallas to San Antonio. Primarily a gas field with smaller oil plays, it boasts proven reserves of 3.37 billion bbl of oil and 2.5 TCF of gas.

State Drilling Statistics

Active Drilling Rigs in Basin- 32
Total Rigs in Texas- 229
Total Rigs in United States- 479
Total U.S. Rigs up 86% YTD

Eagle Ford Permitting Data

Permits Approved – 150

Eagle Ford Top Producers

Top Gas Producer- EOG Resources, INC.
Top Oil Producer- EOG Resources, INC.

Basin Highlights

Mesquite Energy Drops Eagle Ford Assets

Texan oil firm Mesquite Energy, which emerged from bankruptcy last year, is considering selling its Catarina Ranch properties in the Eagle Ford region. Divestiture of assets, which cover 100,000 acres, could be a hint to a sale of the company.  Catarina Ranch has yet to be marketed by the company, which was known as Sanchez Energy prior to its bankruptcy case. It could take another month or more to get the process started. Selling Eagle Ford assets is not an uncommon occurrence as many producers exit to go back to the Permian to capitalize on the most profitable locations. The Eagle Ford holdings of Ovintiv Inc. were sold to Validus Energy in March for $880 million, while privately held EP Energy is reportedly in talks to sell its assets. A sale of Chesapeake Energy Corp.’s interests in the region has also been proposed.

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Mesa II Makes New Acquisition

This is Mesa Royalties II LLC’s first acquisition since its establishment with new financial backer NGP on July 8. The firm acquired a mineral and royalty portfolio in the Haynesville Shale over 15,000 acres. It’s estimated that 50 percent of all currently active drilling permits are centered on the newly purchased land, which should allow the position to continue to have a large cash flow profile for years to come. Details around the transaction from the seller to terms were not publicly disclosed.

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WildFire Energy Makes Eagle Ford Debut

It was revealed that WildFire Energy I Inc. had entered into definitive agreements to acquire Hawkwood Energy LLC, an independent exploration and production firm. Hawkwood’s enterprise value is estimated at about $650 million. According to the agreement, Hawkwood’s existing shareholders will retain a 50 percent stake in WildFire, while the management team and private equity investor Kayne Anderson will hold the other 50. With a current liquids-weighted production rate of roughly 15,000 gross equivalent barrels per day on 160,000 net acres in the Eagle Ford Basin of East Texas, Hawkwood Energy is an independent exploration and production firm. WildFire Energy’s mission is to acquire and optimize oil and gas assets with a high production weighting. WildFire Energy will remain the name of the combined company. WildFire will operate the properties when the deal closes, bringing its significant knowledge in the Eagle Ford to the table.

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Penn Virginia and Lonestar to Merge

Penn Virginia Corp. has agreed to purchase Lonestar Resources US Inc. in an all-stock transaction valued at around $370 million. To date, the Eagle Ford Shale’s crude oil and condensate windows were occupied by Lonestar, an independent E&P company based in Fort Worth, Texas. Upon the acquisition of Lonestar, Penn Virginia aims to boost its inventory sites by 50%, to 750 gross outlets. Besides the predicted annual synergies of over $20 million, Penn Virginia stated the purchase will enhance projected 2021 free cash flow per share by nearly 30%. Additionally, the company anticipates that the greater scale will allow for additional consolidation opportunities in the future.

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Operators with Most Permits (June)

2Teal Operating12
Hyperlinks to available Q1 2021 Reports

Top BOE Production By Operator

4Mesquite Energy
Hyperlinks to available Q1 2021 Reports

Rig Count

Texas Oil Production

Texas Gas Production

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