Penn Virginia to acquire assets in Eagle Ford Shale, US

Penn Virginia has signed an agreement to acquire assets in the Eagle Ford Shale, primarily in Gonzales and Lavaca Counties, US, from Hunt Oil Company.

The proposed acquisition, valued at $86m, expands the company’s core net leasehold position by around 13%, or 9,700 net acres in Area 1, 5,700 of which it currently operates.

The transaction will also enable the company to increase its operated net Eagle Ford acreage from 93% to more than 99% and enhance production by about 1,870 barrels of oil equivalent per day (boepd).

Penn Virginia president and CEO John Brooks said: “This bolt-on acquisition is an excellent fit at an attractive price, increasing our working interest in properties we already own but did not operate.

“The acquisition will increase our net drilling inventory by 17%, while requiring no additional G&A expense.

“Through the combination of increased production and working interest provided by the acquisition, we anticipate full year 2018 production to grow approximately 120% from 2017, and have revised guidance accordingly.”

The assets associated with the transaction have an estimated total resource potential of more than 29 million barrels of oil equivalent (mmboe) and will enable the company to increase proved developing producing (PDP) reserves of around 3.8mmboe.

The transaction is expected to be completed on or before 1 March this year.

Penn Virginia expects to achieve full year production of 22,000boepd-25,000boepd for this year, with estimated capital expenditures of $320m-$360m.