Panhandle Oil and Gas Inc. (NYSE: PHX) has signed an agreement to purchase a 16% non-operated working interest in 11,100 gross leasehold acres (1,775 net acres) located in the core of the Eagle Ford shale oil window in LaSalle and Frio counties, Texas, for $80,400,000 from private sellers. The transaction is projected to close within 30 days and will have an effective date of April 1. The acquisition will be funded utilizing the company's bank credit facility.
The acreage block is largely contiguous and entirely held by production, containing 58 producing wells (52 Eagle Ford, five Pearsall, and one Buda), six Eagle Ford wells currently being completed, and 113 undeveloped Eagle Ford locations. This property is being developed with a one-rig program by operator Cheyenne Petroleum Co.
Estimated net proved developed reserves, based on April 1 SEC pricing, are approximately 1,720,000 barrels of oil, 1,730,000 mcf of gas, and 297,000 barrels of NGL. Reserves for the 113 undeveloped locations, which are projected to have an average effective lateral length of 7,000 feet, are estimated to be 5,570,000 barrels of oil, 4,580,000 mcf of gas, and 789,000 barrels of NGL.