Escondido Resources II LLC sold 11,050 net acres in the Eagle Ford Shale to Chesapeake Energy and EnCap Investments for a total consideration of $115.3 million. The properties consist of three distinct blocks of acreage located primarily in La Salle County in South Texas. Escondido II was advised on the sales transactions by Griffis & Associates LLC and Simmons & Company International.
“This sale is very strategic for Escondido Resources,” said William E. Deupree, President and CEO of Escondido Resources II, LLC. “It allows us to focus on our ‘bread and butter’ Escondido and Olmos reservoirs, which are very economic even in today’s low gas price environment, while still having a substantial position in the gas-prone portion of the Eagle Ford Shale.
Chesapeake shifts from gas to liquids!!
Chesapeake, in Oct 2010, signed a $2 billion Eagle Ford JV with CNOOC. Chesapeake is utilizing 10-12 operated rigs to develop its Eagle Ford leasehold and with the additional capital from CNOOC anticipates increasing its drilling activity to approximately 31 rigs by year-end 2011 and approximately 40 rigs by year-end 2012. Approximately 900 wells are expected to be drilled by year-end 2012.
Chesapeake is ramping up development quickly in the Eagle Ford Shale as the company seeks to shift from ~90% gas to a more balanced oil/gas production mix of 75/25% in 2012.
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