Houston-based WildHorse Resource Development Corp. (WRD) has struck a $625 million deal to acquire 111,000 net acres and associated production in the Upper Eagle Ford Shale of East Texas.

The transaction with Anadarko Petroleum Corp. and affiliates of Kohlberg Kravis Roberts & Co. LP (KKR), is estimated to have cost about $2,900/acre and should be completed by the end of June. Anadarko in January sold its South Texas Eagle Ford assets.

The acreage in Burleson, Brazos, Lee, Milam, Robertson and Washington counties is adjacent to existing WRD land. The acquired properties, 95% held by production, during 4Q2016 produced 7,583 boe/d net from 386 operated wells, 72% weighted to oil.

“This transformative acquisition presented us with a strategic opportunity to consolidate our acreage position,” CEO Jay Graham said. “With a total of 385,000 net acres, we have built a premier contiguous acreage base making us the second largest operator in the entire Eagle Ford trend. Furthermore, we have done so at prices we believe to be extremely attractive, providing highly economic returns on a full-cycle basis.”

WRD, which launched on the New York Stock Exchange in December, already had a pre-acquisition drilling schedule for the Upper Eagle Ford that was to include 36 wells adjacent to the acquired acreage, Graham said. With the new acquisition, WRD “can further optimize pad location and development planning with fewer limitations. As a result, this transaction immediately adds value to our existing program.”

The company recently brought online “some of the strongest East Texas Eagle Ford wells to date, which makes us even more confident in our strategy.”

In March the first Burleson North well, the Paul 134 No. 2H, was ramped up with an initial production rate over 30 days (IP-30) of 1,035 boe/d on a 5,363-foot lateral. When normalized for downtime and a 6,500-foot lateral, the IP-30 was 1,321 boe/d, according to the company. In April, drilling also began an additional six wells near the Paul well.

The properties being acquired during the fourth quarter produced from 68 Eagle Ford, 299 Austin Chalk and 19 Buda/Georgetown operated wells. WRD said it has identified 949 net Eagle Ford locations and 22.9 million boe of proved developed producing reserve.

During 1Q2017, WRD’s output totaled 17,600 boe/d, 49% weighted to oil, 41% to natural gas and 10% to natural gas liquids. With the new deal, and based on well results to date, production guidance for 2017 has been increased to 27,000-31,000 boe/d from 23,000-27,000 boe/d. About 1,000 boe/d of the increase would result from well performance, while 3,000 boe/d would come from the acquired production.

Between January and March, WRD brought online seven net Eagle Ford wells, including the Altimore No. 1H and Jackson No. 1H on a two-well pad along the northeastern border of Burleson and Brazos counties.

“The early results are very encouraging with an IP-30 rate of 1,048 boe/d (84% oil) on the Altimore No. 1H and an IP-30 of 958 boe/d (85% oil) on the Jackson No. 1H,” management said.

In addition to our recent well results, “some of our strongest 2016 wells continue to significantly outperform the 91 boe/foot type curve.” For example, the Candace No. 1H is tracking an estimated ultimate recovery (EUR) of 138 boe/foot, the Belmont Stakes No. 1H is tracking an EUR of 135 boe/foot and the Snap B No. 1H is tracking an EUR of 137 boe/foot.

WRD also expects to bring online an Austin Chalk well before the end of June.

“With 299 operated legacy Austin Chalk wells on the acquired acreage, the horizon is present across the entire position and may potentially be redeveloped in certain select areas,” management said.

In addition, WRD recently completed its second Eagle Ford refracture test with several more planned this year.

With 36 wells in the existing 2017 development plan surrounding the new acquisition acreage, drilling in the Anadarko/KKR position is to begin “almost immediately,” management said.

Capital expenditures for 2017 have been increased to $550-675 million with some funding reallocated to the new acreage. The drilling program has also increased by 10 gross wells, to 100-120 spuds in 2017. The number of gross wells brought online has increased by five to 85-105.

According to terms of the new transaction, WRD agreed to pay Anadarko $556 million and give KKR 6.3 million shares of common stock valued Thursday at about $69 million. To help pay for the purchase, The Carlyle Group, through its U.S. buyout fund Carlyle Partners VI, also agreed to buy $435 million of WRD’s preferred stock, with the remainder of the acquisition funded with debt.