Joining the months-long trend in the industry of transitioning from dry natural gas targets to more liquids-rich plays due to market economics, Dallas-based Matador Resources Co. said recently its 2012 plans will target the Eagle Ford Shale of South Texas while ramping down the development of its Haynesville Shale acreage in North Louisiana.

The independent exploration and production company, which recently completed an initial public offering, estimates its 2012 capital budget at approximately $313 million, with approximately 94%, or $295 million, earmarked for oil and liquids opportunities, including the allocation of approximately 84%, or $264 million, specifically to the exploration, development and acquisition of additional interests in the Eagle Ford.

Matador said it is currently running two rigs in South Texas and expects to continue at that level throughout 2012. The remaining 6%, or approximately $18 million, of its 2012 budget will focus on natural gas-related activities, primarily in the Haynesville. However, the company said it does not plan to drill any “operated Haynesville wells” during the year.

“Following the successful completion of Matador’s initial public offering, we expect another year of strong growth fueled by our ongoing drilling activities in the Eagle Ford Shale play in South Texas,” said CEO Joseph Wm. Foran. “We will continue to execute upon our strategy to increase the oil component of our production and reserves and anticipate oil production to constitute approximately 35-40% of our total production volume and oil revenues to constitute approximately 75-80% of our total oil and natural gas revenues in 2012.”

The company estimates that its 2012 oil production will be between 1.4 and 1.5 million bbl as compared to total oil production of approximately 154,000 bbl in 2011 and approximately 33,000 bbl in 2010. Daily oil production at the end of 2012 is anticipated to be 5,000-5,500 bbl.

While Matador expects to surge oil production, total natural gas production for the year is expected to decline to 12.5-13.5 Bcf from 14.5 Bcf in 2011. The company anticipates that some of the decline in the its Haynesville dry gas production will be offset by production associated with its Eagle Ford drilling activities, which should enjoy higher effective pricing as compared to Haynesville dry gas due to its natural gas liquids content.

More and more producers are weighting their exploration and production budgets heavily in favor of oil and natural gas liquids development. On Tuesday Anadarko Petroleum Corp. said shale and liquids-rich production will be the primary focus for this year, with dry natural gas efforts receiving less than 10% of its 2012 exploration and production budget (see Shale Daily, March 14).