The Eagle Ford formation is still as hot as south Texas, with Sanchez Energy Corp. and Houston-based Marathon Oil Corp. announcing new buys in the shale formation this week.
Marathon is buying 4,800 acres in the south Texas Eagle Ford formation, the Houston-based company said in a press release Tuesday. Marathon will purchase the acreage for approximately $97 million, including about $23 million in carried interest.
The purchase is another move by Marathon to increase its shale formations plays. Marathon realized an increase of 8.4 percent back in 2Q 2013, largely on increased shale activity in the Bakken and Eagle Ford formations.
Sanchez Energy, already an Eagle Ford player, is picking up some additional property there: a $220 million purchase of 3,600 acres in McMullen County, Texas, where oil, rather than natural gas, is likely to be found. Sanchez Energy’s daily production will increase by 15 percent, or 2,000 barrels of oil per day, from its current daily production of 13,500 barrels per day, according to the company’s regulatory filings.
The price paid by Sanchez Energy is in the range of $20-25K per acre, which is in line with model expectations for similar acreage, an analyst at Tudor Pickering Holt Energy said.
The Eagle Ford shale in south Texas is spread over several counties and includes large pools of oil and natural gas. Though it was initially identified as a major natural gas play, Eagle Ford is now considered the sixth largest oilfield ever discovered in the United States.
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