GeoSouthern Energy Corp. will use the proceeds from a $1 billion credit facility that closed Thursday to continue the development of its 173,000 gross acre position in the condensate and oil windows of the Eagle Ford Shale in South Texas, the privately held independent exploration and production company said.

Combined with previous equity and debt financings, the credit facility, which was raised in conjunction with Blackstone Group LP, “will result in the company being fully financed and self-funded for its capital expenditure and investment programs,” said The Woodlands, TX-based GeoSouthern.

“This transaction, together with our partnership with Blackstone, ensures that the company has the right capital base and support to continue to fuel the long-term future growth and development of our Black Hawk field in the Eagle Ford, as well as the company’s other assets,” said GeoSouthern CEO George Bishop.

Funds from the credit facility will primarily be used to fund and develop GeoSouthern’s 50% working interest in the Black Hawk field, a 105,000 gross acre joint venture (JV) in DeWitt and Karnes counties, TX. Funding will also be used to develop GeoSouthern’s 68,000 acre position in Texas’ Gonzalez, Lavaca and Fayette counties.

In 2010 Houston-based Copano Energy LLC struck a long term, fee-based agreement to provide GeoSouthern with gathering, compression, processing and fractionation services for its Eagle Ford Shale production from acreage in DeWitt County (see Shale Daily, Nov. 4, 2010). The agreement called for Copano to gather gas into its DK Pipeline in DeWitt and Karnes counties and provide fully integrated services for both natural gas and natural gas liquids at its Houston Central Complex in Colorado County, TX.

Last year Copano expanded its contract with GeoSouthern to include a larger acreage dedication and signed similar long-term contracts with several other Eagle Ford producers, including Abraxas Petroleum Corp., Paloma Resources, Petrohawk Energy Corp., Pioneer Natural Resources, Reliance Eagleford Upstream Holding LP, Newpek LLC and Riley Exploration (see Shale Daily, Feb. 11, 2011).

Eagle Ford Gathering LLC, a JV of Copano and Kinder Morgan Energy Partners LP, has contracted for at least 550,000 MMBtu/d of Eagle Ford gas production (see Shale Daily, July 5, 2011).

Rig activity continues to soar in the Eagle Ford. For the week ending Feb. 3 there were 229 rigs actively drilling for oil and gas in the play, which marks a 67% increase over the 137 rigs operating one year ago.

Blackstone and Alta Energy Partners, through their Alta Resources LLC JV, last year announced plans to invest up to $1 billion in unconventional natural gas and oil properties in North America (see Shale Daily, April 13, 2011).

In addition to its operations in the Eagle Ford, GeoSouthern owns and operates acreage positions in the Giddings Austin Chalk Field, the Brookshire Dome Field and the Austin Chalk in East Texas.