SilverBow Resources Inc. acquired a new position in the dry gas Dorado play, which the Eagle Ford Shale producer said was made through a series of transactions totaling $50 million.
“We are excited to announce our new position in the Dorado play, which we assembled by leveraging our long-standing relationships in the area and our basin-specific expertise,” commented SilverBow CEO Sean Woolverton in a company release on Sept. 15.
Houston-based SilverBow assembled the 7,500 net-acre position in Webb County, Texas, through a series of transactions, including bolt-on acquisitions, leasing and drill-to-earn agreements. According to the company, approximately $40 million of the total $50 million was incurred during the third quarter.
“The first two wells that we have brought online in this position are exceeding our expectations and further confirm the robust economics of both the Eagle Ford and Austin Chalk reservoirs across Webb County.”—Sean Woolverton, SilverBow Resources Inc.
The new position doubles SilverBow’s current Webb County acreage, which now totals 15,000 acres with an estimated drilling inventory exceeding 200 gross locations. Woolverton said this represents approximately eight years of development at a one-rig pace.
“Our current plan is to run a contiguous rig to develop the inventory as we ramp our gas production into a very favorable price environment,” he said.
Silverbow’s latest acquisition announcement follows an already blockbuster year of M&A activity by the company.
Earlier this year, SilverBow agreed to acquire two independent Eagle Ford Shale operators, Sundance Energy Inc. and SandPoint Operating LLC, for a combined $425 million plus up to another $15 million in contingent payments. The transactions, which closed in July, comprised of acreage in Atascosa, La Salle, McMullen and Live Oak counties in South Texas.
The new position in Webb County has similar reservoir characteristics and economics as SilverBow’s prolific Fasken position, also located in Webb, Woolverton said in the Sept. 15 release.
“This new area closely resembles the reservoir quality of our prolific Fasken asset, and aligns with our strategy of adding scale in core areas and bolstering our Austin Chalk and Eagle Ford inventory,” he said.
SilverBow estimates a net recoverable resource of approximately 650 Bcf from the new block in Webb County. Current net production is approximately 30 MMcf/d.
The new block adds stacked pay and co-development inventory with over 50 net drilling locations across the Austin Chalk and Eagle Ford formations described by the company as high rate of return.
SilverBow already drilled one Eagle Ford well and one Austin Chalk well on the new acreage, both of which were brought online in late July. Gross production from the Eagle Ford well is 13 MMcf/d and the Austin Chalk well is producing 17 MMcf/d gross.
“The first two wells that we have brought online in this position are exceeding our expectations and further confirm the robust economics of both the Eagle Ford and Austin Chalk reservoirs across Webb County,” Woolverton said.
The Austin Chalk well represents SilverBow’s seventh Chalk well drilled in Webb County with the 17 MMcf/d initial production rate being the best performing well to date, according to the company release. Further, Silverbow noted that all seven of its Austin Chalk wells in Webb are exceeding the company’s 2 Bcf per 1,000 ft of lateral length estimated ultimate recovery type curve.