Carrizo Oil & Gas Inc. (NASDAQ: CRZO) signed a deal Oct. 24 to acquire about 15,000 acres in the core volatile oil window of the Eagle Ford Shale from Sanchez Energy Corp. (NYSE: SN)

Carrizo will pay $181 million in cash for Sanchez’s Eastern Cotulla assets located in LaSalle, Frio and McMullen counties, Texas. The bolt-on deal increases Carrizo’s position to about 103,000 net acres in South Texas. Much of the acreage is concentrated in LaSalle, McMullen and Atascosa counties.

Carrizo is paying about $5,900 per acre — and $1.1 million per location, which is “roughly in the ballpark of other Eagle Ford acquisitions,” said Chris Stevens, an analyst at KeyBanc Capital Markets.

The company’s plans to finance the deal with a public equity offering should also help de-lever its balance sheet.

“We estimate that a combination of acquiring production and over-equitizing the acquisition results in a 0.3x reduction in leverage at yearend 2017,” Stevens said in an Oct. 24 report.

The sale is the second for Sanchez this month, following an Oct. 6 agreement to sell midstream and production assets for $107 million. At the end of the third quarter, Sanchez’s liquidity was $629 million, including $329 million in cash.

Based on Carrizo’s current development spacing assumptions, which include a single layer within the Lower Eagle Ford, the acquisition increases Carrizo’s drilling inventory to about 1,100 net locations. The acreage is 100% operated and carries no other drilling requirements.

Carrizo will also increase its proved reserves to 158.5 million barrels of oil equivalent (MMboe).

Sanchez put the assets’ net proved reserves at 6.9 MMboe, and said the reserves were 90% developed. It also said net production was 3 Mboe/d.

S.P. (Chip) Johnson IV, Carrizo’s president and CEO, said the acquisition adds 15% more acreage and 10% inventory. The acreage includes upside from infill drilling and development of other zones.

“A number of the acquired properties are also contiguous with our core acreage position, which should allow us to capitalize on efficiencies such as the ability to drill longer lateral wells from our existing leasehold,” Johnson said. “In addition to the increased inventory and potential operational efficiencies, we also believe the transaction is accretive on a variety of financial metrics, including cash flow and earnings per share.”

The transaction has an effective date of June 1, 2016, and is currently expected to close by mid-December.

Carrizo plans to fund the acquisition with the proceeds from a separately announced equity financing. The company upsized its offering to 6 million shares of common stock late Oct. 24. Carrizo said gross proceeds would be about $225 million.

Darren Barbee can be reached at dbarbee@hartenergy.com.