Penn Virginia Corp. said Tuesday it has agreed to explore a portion of the Eagle Ford Shale of South Texas with an undisclosed "major oil and gas company."

The Radnor, PA-based company said the agreement would create an area of mutual interest (AMI) covering approximately 13,000 gross acres in Lavaca County, TX, with Penn Virginia serving as operator. The acreage is near additional acreage Penn Virginia owns in southeastern Gonzales County.

"[We] believe the AMI acreage is highly prospective for the Eagle Ford Shale," Penn Virginia CEO H. Baird Whitehead said, adding that the company's nearby holding in Gonzales County is where "we have drilled some excellent wells. We now have a very good opportunity to increase our prospective net acreage position in the Eagle Ford to approximate our near-term goal of 25,000 net acres."

According to Penn Virginia, its minimum working interest for the project will be about 50%, but that could change if other companies decided to join in the future. Penn Virginia also estimated that about 40 drilling locations may exist in the new AMI area, with more possible if there was downspaced drilling.

Under the terms of the agreement, Penn Virginia will drill up to six wells by Sept. 1 and will carry the unnamed company on its working interest for the first three wells.

On Dec. 13, Penn Virginia announced 4Q2011 production guidance of 10.7 to 11.0 Bcfe, with about 24% from crude oil and about 12% from natural gas liquids (NGL). The company said the guidance figures were 1.5-1.7 Bcfe lower than previously reported (12.2-12.7 Bcfe) due to the timing of Eagle Ford completions and revised production estimates.

Penn Virginia produced about 11.9 Bcfe, or 129.9 MMcfe/d, during 3Q2011. Of that total, 2.1 Bcfe came from the Eagle Ford.

Whitehead told financial analysts in August that the company was investing in the Eagle Ford to one day become a bigger supplier of oil and NGLs (see Shale Daily, Aug. 5). Initial production in the Eagle Ford started in February.