WildHorse to become pure-play Eagle Ford producer

Feb. 12, 2018
WildHorse Resource Development Corp., with recent acquisition and divestiture agreements, has become a pure-play Eagle Ford producer with oil representing 70% of its production in 2018.

WildHorse Resource Development Corp., with recent acquisition and divestiture agreements, has become a pure-play Eagle Ford producer with oil representing 70% of its production in 2018.

The company signed an agreement to sell Over-Pressured Cotton Valley assets in North Louisiana, primarily in Webster, Claiborne, Lincoln, Jackson, and Ouachita parishes, to an undisclosed buyer for $217 million and contingent payments of up to $35 million based on the number of wells spud on the assets by the buyer over the next 4 years.

The assets include 90,000 net acres of leasehold and 473 operated wells with estimated total proved reserves at Dec. 31, 2017, of 412.1 bcf of gas equivalent (41% proved developed, 98% natural gas). Estimated fourth-quarter 2017 production from the properties was 46.9 MMcfed (96% gas).

The transaction is expected to close by Mar. 30 with an effective date of Jan. 1.

Following the deal’s closing, 100% of WildHorse’s proved reserves will be in the East Texas Eagle Ford and Austin Chalk (OGJ Online, May 11, 2017).

Adding to its Eagle Ford acreage, the company agreed to buy producing and non-producing properties in Lee County, Tex., for $19.3 million from an undisclosed seller. The properties consist of 17,453 net acres immediately contiguous to WildHorse’s existing Eagle Ford properties and 1 operated (4 nonoperated) producing horizontal wells with combined net production of 59 boe/d. The acreage includes rights exclusively to the Eagle Ford and is 98% held by production. WildHorse estimates 110 net locations with an average NRI of 82%. Following closing, WildHorse expects to hold over 404,000 net acres in the Eagle Ford.

The deal is expected to close on Mar. 1 with an effective date of July 1, 2017.

Cash from the sale will be used to pay down debt under the company’s revolving credit facility. WildHorse expects its borrowing base to remain unchanged at $875 million.

Eagle Ford refracs

In the Eagle Ford, the company recorded results of two refrac tests adjacent to the acquisition acreage in Lee County.

The first well, the Gold 107 No. 1, about 3½ miles southwest of the Burleson County line, achieved a peak 24-hr rate of 1,078 boe/d including both its base production and the uplift from the refrac. The Gold 107 reached a peak 30-day uplift of 388 boe/d (95% oil) on a 5,711-ft lateral.

The second refrac well, the Fritsche 109 No. 1, about 10½ miles southwest of the Lee and Burleson County line, came online at a peak 30-day uplift of 481 boe/d (88% oil) on a 5,387-ft lateral. While there have been no prior Gen 3 wells in Lee County, the Gold and Fritsche refracs utilize a Gen 3 style design and are both performing in line with similar successful refracs completed by the company in Burleson County.

These wells represent the first examples of WildHorse’s strategy to cost effectively test the Gen 3 completion design through the use of refracs in areas with only Gen 1 legacy completions.

Contact Mikaila Adams at [email protected].