Austin-based oil company buys more Eagle Ford Shale acreage
An Austin oil company has acquired 23,000 acres in the Eagle Ford Shale, another sign of the growing activity in the South Texas oil field.
Venado Oil and Gas and its partner, the New York private equity firm KKR, declined to disclose the seller and cost of the acquisition, but said Friday that the property is producing about about 4,500 net barrels of oil equivalent a day, with oil accounting for about three-fourths of the output. The purchase increases the Venado’s and KKR’s holdings in the Eagle Ford to to 136,000 acres producing about 43,000 barrels of oil equivalent a day.
The Eagle Ford lately has been overshadowed by the Permian Basin, a particularly prolific shale play in West Texas that accounts for more than half the nation’s active oil drilling rigs and nearly one-third of its crude production. But as crude prices have risen, and operators in the Permian have contended with shortages of labor and pipelines, the Eagle Ford has gotten more attention. Large oil and gas companies like ConocoPhillips are refocusing on the Eagle Ford Shale.
In March, Sundance Energy, a Denver exploration and production company, paid $102 million to acquire more than 10,000 acres for Pioneer Natural Resources, an Irving company that is divesting all of its non-Permian assets.
The Eagle Ford is estimated to hold hold 8.5 billion barrels of recoverable oil, making it the second largest field in the country after the Permian. The U.S.G.S. said the field could also hold 66 trillion cubic feet of natural gas, making it third in the country.
Oil and gas drilling rig counts in the shale play have climbed to 81 from a low of 29 in mid-2016, according to the Houston oil field services company Baker Hughes. That compares to 475 in the Permian Basin.
Venado and KKR formed a partnership in 2016 to consolidate proven oil and gas positions in the Eagle Ford. KKR is a global investment firm that is funding the partnership through its Energy Income and Growth Fund I. Since then the partnership has bought acreage from Houston-based Cabot Oil & Gas and Denver-based SM Energy.
Oil settled Friday in New York at $73.80 a barrel, up 86 cents or about 1 percent.
Rye Druzin is a San Antonio Express-News energy reporter. Read more of his stories here. | email@example.com | Twitter: @druz_journo