Eagle Ford players Penn Virginia, Lonestar merge
US-shale focused Penn Virginia announced July 12 that it had acquired rival producer Lonestar Resources in an all-stock transaction, consolidating positions across the Eagle Ford basin.
Both companies hold acreage in the Eagle Ford basin in Texas, with Lonestar alone accumulating more than 53,550 net acres.
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The US Energy Information Administration (EIA) puts Eagle Ford as the third-largest oil producer and the fifth-largest gas producer among the seven primary shale basins. Production is expected to decline slightly in both oil and natural gas from July to August, according to the EIA’s latest drilling productivity report.
“This is an exciting time for Penn Virginia as we expand our Eagle Ford footprint with the high-quality assets of Lonestar,” Penn Virginia CEO Darrin Henke said. “This transaction further solidifies the company’s position as a premier Eagle Ford operator and provides additional scale and synergies while still delivering operational excellence.”
Lonestar exited bankruptcy in November after eight months, eliminating some $390mn in aggregate debt obligations. It still had net debt of $239mn during the three months ending March 31.
About half of Lonestar’s total Q1 production was in crude oil, with the rest split more or less evenly between natural gas and natural gas liquids. The company said it expected higher volumes due to new well activity in the Hawkeye segment of the Eagle Ford basin.