Goodrich Petroleum Corporation has entered into a definitive agreement to sell its proved reserves and associated leasehold in the Eagle Ford Shale, valued at $118 million.
The company made the announcement Monday through a press release. According to Goodrich, the reserves and assets located in LaSalle and Frio Counties, Texas will book a gain of approximately $50-60 million after factoring in customary closing adjustments. The deal is expected to close on or before September 4, 2015.
Goodrich will retain roughly 58 percent (17,000 net acres) of its undeveloped leasehold in the play for future development or sale. The assets included in the sale produced an average of approximately 2,850 barrels of oil equivalent (Boe) per day, 75 percent of which was oil, during the first quarter of 2015.
“The monetization of our proved reserves and associated acreage from our drilling efforts to date greatly improves our liquidity while maintaining a position in the Eagle Ford for future development or sale,” Stated Company President Robert Turnham.
Turnham noted that acreage retention was an important aspect of the deal for Goodrich.
“It allows for additional future value creation from the asset in what we believe will be an improved oil price environment,” Turnham said. “We continue to drive our well costs lower yet will remain conservative with our activity level.”
Some of the transaction will help to pay off bank debts. Turnham stated that the corporation’s full year capital expenditure budget is about $100 million and will sharply reduce capital expenditures in the last three quarters of the year.