Although the volatile commodity price environment has caused some operators to sell off assets, the Eagle Ford Shale remains a world-class oil field to those that can make it work. A recent report from Wood Mackenzie called the Eagle Ford “the cream of the crop” of North American plays, and stated that low oil prices will cause top operators to drive down drilling and completions costs, leading to “economic drilling well below $50.”

A&D

The Eagle Ford has seen some buyers seeking to profit from the lower-price environment. In October, Carrizo Oil & Gas purchased additional leasehold and producing interests from Eagle Ford Minerals LLC for $250 million in cash. Carrizo bought 6,820 net acres in LaSalle, Atascosa and McMullen counties, which increased its drilling inventory by 93 net locations to more than 915.

Meanwhile, Atlas Resource Partners acquired Eagle Ford assets in Atascosa County from an undisclosed seller that included 22 oil-producing wells and 19 undeveloped locations that will be fully owned and operated by Atlas.

Private equity is also getting in on the M&A action. Private-equity firm KKR and Anadarko Petroleum plan to develop Eaglebine acreage in southeastern Texas. KKR received about 36,000 net acres and 40% of Anadarko’s working interest in 33 Eaglebine wells in exchange for funding $442 million of Anadarko’s future capital expenditures. The joint development acreage is in Brazos, Burleson and Robertson counties. In the play, Anadarko drilled five wells using one rig during the third quarter.

Other players are exiting. Goodrich Petroleum is considering selling all or a portion of its 45,000 acres (30,000 net) in Eagle Ford Shale acreage in the first half of 2015. The company has significant investment in the Tuscaloosa Marine Shale (TMS) and company officials indicate about 95% of Goodrich’s 2015 budget will be earmarked for TMS drilling.

Alta Mesa Holdings will exit the Eagle Ford after completing a December sale agreement with ReOil Eagle I LLC. According to EagleFordShale.com, the properties are primarily in Karnes County and all are non-operated. In March 2014, Alta Mesa had another large Eagle Ford asset divestiture, selling 15,200 (800 net) acres in Karnes County to Memorial Production Partners for $173 million.

Revised spending

Across the entire industry, operators are scaling back spending in response to the oil price drop. Among Eagle Ford players, Sanchez Energy revised its 2015 spending program in January. The company plans to drill fewer Eagle Ford and Tuscaloosa Marine shale wells this year than it had planned just two months prior. In the Eagle Ford, Sanchez Energy plans to operate four gross (3.5 net) rigs in 2015, which is down from the company’s fourth-quarter 2014 level of eight gross (seven net) active rigs in the play.

Comstock Resources is suspending exploration activities in Tuscaloosa Marine and Eagle Ford because of lower oil prices. According to IHS Inc., the company currently has four operated rigs drilling on its Eagle Ford properties. The 2015 budget will cover completion costs of 13 Eagle Ford wells that were drilled in 2014 but will be completed in 2015, and $34 million for drilling five wells on its East Texas and South Texas Eagle Ford acreage.

EagleFordShale.com reported in October that Clayton Williams Energy may scale back plans to drill more Eagle Ford wells during the upcoming year. Clayton Williams has 22 horizontal Eagle Ford wells on its legacy Austin Chalk acreage block in Burleson, Robertson and Lee counties, that have been on-production for 30 days or more.

To view the top acreage holders in the Eagle Ford, click here.