BP plc has accumulated close to 450,000 net acres in the the Eagle Ford Shale in South Texas, executives said Tuesday.
The purchases over the past year came about through "high-grading the portfolio," said Executive Vice President Andy Hopwood, who is in charge of strategy and integration. The management team spoke with investors during a webcast to discuss the company's quarterly and year-end earnings performance.
"We've got about 6 Tcf of resources spread over about 450,000 acres," said Hopwood. "We don't divulge specific deals, but we have a working relationship with Lewis Energy [Group], and they operate it...It is going very, very well."
BP first partnered with Lewis Energy Group (LEG) in early 2010 by acquiring a half-stake in 80,000 acres in the Eagle Ford for $4,000-4,500 an acre. The partnership followed BP's purchase in July 2008 of Chesapeake Energy Corp.'s Woodford and Fayetteville shale holdings, which together amounted to close to 630,000 net acres.
Privately held LEG, founded in 1982 and based in San Antonio, claims to be the "leading" natural gas producer in South Texas. LEG operates more than 1,300 wells; the first well in the Eagle Ford was drilled in 2002.
In addition to the shale holdings, BP has material positions in the unconventional fields in Wamsutter, WY, and is one of the biggest gas producers in the San Juan Basin in Colorado and New Mexico. BP wants to leverage its gas expertise globally, something that competitor Royal Dutch Shell plc also is planning to do (see Shale Daily, Feb. 6).
Globally, BP is "going to a situation where we have 20 'real' exploration tests a year," said Hopwood. "Last year we managed six, and this year we're heading for 12...we're only operating five, so there's some uncertainty in that. But we have a portfolio that will sustain 15-25 projects a year."