Houston-based independent Eagle Ford Oil & Gas Corp. has acquired an 85% working interest in prospective acreage in Frio County, TX, in the "heart" of the Eagle Ford Shale of South Texas, the company said Monday.
Operators in the surrounding acreage, including Cabot Oil & Gas, Goodrich Petroleum and others, have an apparent 100% completion success rate in the three formations, according to Eagle Ford Oil & Gas's Ronald Bain, who heads the company's technical team. Based on a nominal 160-acre well spacing, the company could drill more than 20 wells for each reservoir, it said.
"This acquisition is the foundation for future growth that we have been looking for since we completed the merger between Sandstone and Eagle Ford last year," said CEO Paul Williams. "The fact that the surrounding fields have a 100% success rate for wells in the three different formations means we have several years of developmental drilling with little geological risk."
The company acquired the working interest in 3,684 acres south of San Antonio. The purchase price was $6.26 million and is being funded by project finance from a private fund. The acreage lies within the historic Pearsall Field where more than 200 million boe have been produced from the Austin Chalk, sourced by the Eagle Ford Shale, the company said.
"Current success of industry activity in the immediate area demonstrates a high degree of prospectivity in the Austin Chalk, Eagle Ford Shale and Buda Lime, all of which are primarily black oil reservoirs," the company said. "Substantial legacy well data within and adjacent to the acreage clearly indicate the presence of effective fracture systems in all three reservoirs."
Eagle Ford Oil & Gas said it has rights to all formations, including the deeper Pearsall Shale, a condensate-rich gas reservoir that the industry has just begun to exploit in the area.
Surrounding new fields currently producing from the three formations are believed to have estimated ultimate recoveries between 350,000 and 500,000 boe per well. Initial production rates have ranged from 400 boe/d to more than 1,000 boe/d.
Development of oil and natural gas in the Eagle Ford contributed $25 billion in economic output to the South Texas region last year, according to a recent study by the Center for Community and Business Research at The University of Texas at San Antonio Institute for Economic Development (see Shale Daily, May 10).