Fresh off an asset streamlining and an Eaglebine joint venture (JV) formation with EOG Resources Corp. (see NGI, April 1), Houston-based ZaZa Energy Corp. executives are touting their heavy weighting to the emerging stacked South Texas play and said what’s learned from the JV will add value to the company’s 100% owned acreage.

“ZaZa is the most heavily weighted company to this play in terms of net Eaglebine acres as related to total enterprise value…,” ZaZa CEO Todd Brooks said during an earnings conference call Tuesday. “Given this relatively high Eaglebine weighting, the company stands to gain relatively more than any other public company as the Eaglebine gets de-risked within the JV, on our offset carve out acreage and on the acreage developed by surrounding operators.

…”[I]t is important to understand that it is not just the lower Eaglebine zone that we are looking to develop. The company is not taking single-reservoir risk; we are dealing with stacked pay here. There are multiple zones for development and multiple ways to go about developing these different zones, which is important from a risk diversification standpoint.”

Last year in the Eaglebine, ZaZa drilled one horizontal well targeting the Lower Eaglebine (Stingray A-1H) and began drilling on one vertical well targeting the Lower Cretaceous (Commodore A-1). ZaZa’s operations on the Stingray A-1H successfully drilled a vertical pilot hole through the Lower Eaglebine section, obtaining critical open hole logs and core data. ZaZa also plugged back and successfully drilled a 4,000-plus foot lateral targeting the Lower Eaglebine section, ran production casing and fracked 15 of 16 stages.

As of April 5, there were 28 rigs drilling in the Eaglebine, 22 of which are horizontal or directional, according to Smith Bits data and NGI calculations. Twenty-two of the current rigs are targeting oil, with the remaining six hunting for gas. Leon County in eastern Texas had the most current activity with seven rigs, followed by neighboring Brazos and Madison counties, which each had five rigs operating with their borders.

Halcon Resources is currently the most active driller in the play with six rigs in operation, followed by ExxonMobil/XTO with three rigs.

“We will continue to divest select Eagle Ford assets as we high grade our acreage position with a focus on the Eaglebine,” Brooks said. “We do not anticipate any dilutive transactions in 2013 or 2014. The focus is on developing the Eaglebine within the JV and as a standalone project independent of the JV. We will run parallel tracks. We always remain opportunistic, and if the right production acquisition came along, we would take a hard look at it.”

CFO Ian Fay said that over the last year the company has worked to strengthen its balance sheet by cutting interest, general and administrative expenses as well as lowering capital expenditure requirements. Coming up in the second quarter is $60 million in cash upon consummation of the Eaglebine JV and the recently announced sale of the company’s Moulton assets.

“These transactions should further strengthen our financial position, provide us with additional working capital to pursue development of our 100% owned 19,000 net acres in the Eaglebine and execute proof-of-concept opportunities in other emerging plays in the U.S.,” Fay said.

ZaZa reported a net loss of $106.2 million for 2012, compared with a net loss of $2.9 million for 2011. Additionally, the company recorded a net loss from discontinued operations, net of tax of $52.2 million for 2012.

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