GulfTex markets Eagle Ford & Austin Chalk package

October 18, 2017
PLS A&D Transactions

The third and fourth iterations of the San Antonio-based GulfTex Energy franchise have retained RBC Richardson Barr to market assets in the core of the Eagle Ford and Austin Chalk in the prolific oil window located in Karnes County.

The package consists of 9,800 net acres (28% HBP), providing scale for the buyer to aggregate or bolt-on. Projected net production for November is 13,000 boe/d from 30 wells—18 Lower Eagle Ford and 12 Austin Chalk—with expected Q4 cash flow of $12 million. A deal would likely be the first large transaction in Karnes County since Enervest’s $1.3 billion acquisitions in 2016, which included the $501 million purchase of Gulftex III and Gulftex Karnes EFS’s Eagle Ford position.

With ~$40/bbl break-even, economics are competitive with the highest-quality, lowest-cost US plays. The assets include nine operated prospect areas and one non-op property (1% of the leasehold), and a fully de-risked position with ~300 Eagle Ford and Austin Chalk locations. There is significant stacked pay potential across GulfTex’s position, with single-well IRRs regularly surpassing 50%. GulfTex’s Lower Eagle Ford EURs average ~1.0 MMBoe with an average lateral length of 4,500 ft. Additionally, recent Austin Chalk completions in Karnes Co. exhibit the upside potential of the asset and economic feasibility of using modern completions. For instance, the Mika Unit 101H had an IP30 of 2,082 boe/d, and estimated EUR in Karnes exceeds 1.7 MMBoe. GulfTex’s modern completions around the Karnes Trough provide significant uplift to offset legacy wells. Offset operators, including Enervest, EOG, Murphy and Encana, have allocated significant capital to further develop around GulfTex’s position. To learn more about this attractive offering, please visit PLS Listing No. PP 9684DV.