EOG Resources Inc. (NYSE:EOG) is divesting acreage in the Texas Panhandle with existing production and potential for further development.
Meagher Energy Advisors is assisting with EOG's sale of 8,500 net acres including production from 28 existing wells within the defined Tonkawa play in Hemphill County, Texas.
The sale includes high working interest and operational control on acreage that is mostly contiguous and held by production from vertical wells. An estimated 2,100 net acres are non-developed with 78.1% net revenue interest (NRI). Lease expirations are not an issue.
Existing Assets | |
Wells | 1 horizontal/27 vertical |
EOG operated | 27 wells |
Targeting | Tonkawa/Douglas/Morrow |
Average interest | 98.68% WI/77.07% NRI |
Gross production for October 2013 | 52 oil/15 NGL/643 Mcf barrels per day |
Net Sales for October 2013 | 40 oil/12 NGL/495 Mcf barrels per day |
PV10 | $6.58 million proved producing |
Operating cash flow for October 2013 | $172,551 net |
Features of the Tonkawa development include abundant subsurface well control and reduced geological risk and need for pilot holes. There is a potential development program for three horizontal wells per section with the primary target the Tonkawa Sand at an average depth of 7,700 feet and thickness between 30 and 40 feet.
Identified upside potential consists of 37 horizontal Tonkawa locations with expected recovery of 303,000 barrels of oil equivalent (BOE) per well. The expected cost for completed wells is $4 million. Potential exists for future waterflood development with associated tax credits.
Bids are due Feb. 21 with closing expected March 28. The sale will have an effective date of Feb. 1. For information, contact Teri Williams, Meagher chief operating officer, at 918-481-5900 ext. 224.
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