Panhandle Oil and Gas Inc. said Thursday it signed an agreement for nonoperated working interest in 11,100 acres in the core of the Eagle Ford shale in Texas.
Panhandle will pay $80.4 million for the 16 percent nonoperated working interest in 58 producing wells in LaSalle and Frio counties in Texas. The transaction, funded by the company’s credit facility, also includes six wells being completed and 113 undeveloped Eagle Ford locations. The property is being developed by Cheyenne Petroleum Co. of Oklahoma City.
Michael C. Coffman, Panhandle’s president and CEO, said the properties produced an average of 733 net equivalent barrels of oil per day in the first quarter.
The transaction will significantly increase Panhandle’s current oil production of 720 barrels per day.
“In our estimation, the Eagle Ford is the premier oil resource play in the country,” Coffman said. “The Eagle Ford has infrastructure in place to move oil by pipeline to the Gulf Coast and enjoys reasonable year-round weather conditions. In addition, a number of large companies are studying and applying new technologies to the play.”
As of April 1, the property has estimated net proved developed reserves of about 1.72 million barrels of oil, 1.73 billion cubic feet of gas and 297,000 barrels of natural gas liquids.
Panhandle Chief Operating Officer Paul F. Blanchard said.
“This is a tremendous opportunity for Panhandle to add material oil reserves to our portfolio in the core of one of the most prolific oil fields in the world, with the infrastructure already in place to efficiently develop and market those reserves. We believe that continued technological innovation will only add to the ability to efficiently recover more of the oil in place from the vast resource,” he said.