Penn Virginia Corp. (PVAC) said Tuesday that it would spend $86 million in cash to acquire Hunt Oil Co.’s working interest across 9,700 net acres in the Eagle Ford Shale.
PVAC already owns the properties, but the company said the deal would boost its operated Eagle Ford position from 93% to 99% of its acreage in the play. The properties are mostly located in Gonzales and Lavaca counties, TX.
They include 1,870 boe/d of production, consisting of 89% oil. There are also 75 net de-risked lower Eagle Ford locations on the properties. PVAC CEO John Brooks said the increased production and more working interest would help grow year/year production by 120% in 2018.
The company is now guiding for full-year production of 22,000-25,000 boe/d on a capital expenditures budget of $320-360 million. The deal is expected to close by March 1 and have an effective date of Oct. 1, 2017. PVAC said it would fund the acquisition with borrowings under its credit facility.
PVAC, which focuses almost exclusively on the Eagle Ford, said it recently turned the four-well Rhino Hunter pad there to sales with an initial production rate of 4,455 boe/d. Another pad, the Oryx Hunter, which has three wells, came online at an initial production rate of 2,681 boe/d. After the acquisition, the company said it would have more than an 80% working interest in both wells.
The company’s two-well Geo Hunter pad, meanwhile, was recently turned to sales using a new completion design at an initial production rate of 5,465 boe/d. PVAC has a 93% interest in the wells. All the of new wells were drilled into the lower Eagle Ford.