Shell agrees to sell Eagle Ford acreage to Sanchez Energy

Source:Royal Dutch Shell

Shell announces sale of Eagle Ford acreage in South Texas

Royal Dutch Shell plc (Shell) has agreed to sell its 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas to Houston-based Sanchez Energy Corporation for approximately $639 million, subject to closing.

The sale includes approximately 176 operated producing wells and associated field facilities and infrastructure. Net production in Q1 2014 was approximately 24,000 barrels of oil equivalent per day, with approximately 60 percent crude and natural gas liquids.

Following the acquisition, Sanchez Energy will have control of 226,000 acres in Texas' Eagle Ford. The company estimates the deal will allow the firm to have up to 3,000 potential drilling sites and could produce about 42,800 barrels of oil equivalent per day.

Of the drilling sites to be acquired, Sanchez Energy said about 200 locations are considered low risk and high rate of return areas. 

This transaction is part of Shell’s restructuring of its North Americas resources plays (shale oil and gas) portfolio, to focus on acreage positions that can reach the scale required by Shell. In addition to this sale, Shell previously divested its acreage position in the Mississippi Lime in Kansas, its Utica shale position in Ohio and a portion of its acreage in the Sandwash Niobrara basins in Colorado as part of this strategy.

Sanchez Energy previously announced it earned $134.6 million in revenue for the first quarter of 2014, up 334 percent from a year earlier.

The agreement is effective January 1, 2014 and is expected to close at the end of the second quarter of this year.

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