US-based exploration company Lonestar Resources has signed agreements with undisclosed parties to acquire oil and gas properties in the Eagle Ford Shale play for $116.6m.
The total purchase price consists of $105m in cash and 2.6 million Lonestar Class A common shares.
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Located in Karnes, Gonzales, DeWitt, Lavaca and Fayette counties in Texas, the properties have proved reserves of around 25.4 million barrels of crude oil, 3.1 million barrels of natural gas liquids, and 17.5 billion cubic feet of natural gas.
Lonestar CEO Frank Bracken III said: "We have scaled our business with Eagle Ford Shale properties that are located in our core area, which our technical team understands extremely well.
“We plan to increase our Eagle Ford Shale drilling rig activity from one rig to two rigs no later than 1 January 2018, which will allow us to scale our drilling programme and obtain a dedicated frac spread, and which we believe will afford us greater economies of scale, cost savings, and better precision and timing of execution.”
In addition, the company entered agreements to secure funding for the purchase.
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By GlobalDataOnce the transactions are completed, Lonestar will acquire 115 gross / 80.3 net producing oil and gas wells.
The company will own an average 70% working interest in the producing wells and plans to operate 81, with a working interest of 93%.
Lonestar will acquire the leasehold totalling 30,219 gross / 21,238 net acres, 94% of which is held by production.
The transactions are set to increase the company’s net oil and gas production by 39% from 5,266 barrels of oil equivalent per day (boepd) to 7,318boepd, proforma the three months ending 31 March.
Furthermore, the company's net drilling locations will increase by 70% from 155 to 263 net locations.
