Transaction is Venado’s second Eagle Ford purchase this year
Exco Resources (ticker: XCO) announced the sale of its South Texas assets on Monday, with an estimated closing cost of $300 million. Venado Oil & Gas will buy the property, adding to its other recent acquisition.
Exco’s South Texas assets total 49,300 net acres, with 95% of these held by production. The properties produced 4.5 MBOEPD in Q4 2016, and contain an estimated 930 MMBOE of proved reserves. The purchase price of $300 million equates to an estimated acreage valuation of $6,085/acre. The sale is expected to close in June 2017. Exco originally bought in to the Eagle Ford in July 2013, when the company paid $680 million for about 55,000 net acres.
Sale proceeds will fund Haynesville development
Exco has divested these properties in an effort to focus on its core Haynesville and Bossier shale assets. The company owns about 96,300 net acres in East Texas and North Louisiana, where fourth quarter production averaged 209 MMcfe/d. Exco did not operate any rigs on its properties in Q4 2016, so the funds from this sale will allow the company to restart drilling. Exco also owns an about 184,000 net acres in West Virginia and Pennsylvania, where it produced 27 MMcfe/d in Q4 2016.
Venado has acquired 86,800 Eagle Ford acres in 2017
This acquisition is the second Eagle Ford purchase Venado has made in the last month. On March 13, the company closed on the purchase of SM Energy’s non-operated Eagle Ford assets. Originally announced in January, in this transaction Venado purchased 37,500 net acres for $800 million. This equates to a purchase price of $21,300/acre, much higher than the price spent in the most recent acquisition. The acreage purchased from SM included about 27.6 MBOEPD of net production.
Venado, a private company funded in part by KKR, is a pure-play Eagle Ford operator and is currently looking to expand its asset base.
