Barnett Shale

Fort Worth firm to buy $125 million in Chesapeake properties

Energy & Exploration, a recently formed company that is also preparing to sell shares to the public, said in a Securities and Exchange Commission filing Monday that it has agreed to pay $125 million for  57,275 net acres in the Eagle Ford Shale in South Texas and Woodbine sand in East Texas, or Eaglebine as it is sometimes called. Energy &Exploration, which lists a downtown Fort Worth headquarters address, said it expects the acquisition to close in the fourth quarter. The company in an S-1 filing for an initial public offering said it dates to 2006 and began operations in 2008. The SEC disclosure says it "began leasing in the Eagle Ford Shale," mostly McMullen and LaSalle counties, and sold acreage to other independents. The S-1 says the company in 2010 and 2011 "engaged in the acquisition and sale of undeveloped oil and natural gas leasehold interests. Beginning in the first quarter of 2012, we adopted a business strategy to develop and exploit our undeveloped leasehold acreage in order to provide a greater return on investments in those properties."

Energy & Exploration founder and CEO is Hunt Pettit, 42, who has 16 years experience as a landman and entrepreneur, and who from 2005 to 2008 was contract land manager in the Barnett Shale for David Arrington Oil & Gas, according to the S-1. The disclosure says he helped start North American Shale Investment in 2011and holds 58 percent of Energy & Exploration's common stock. It also says he filed for Chapter 7 bankruptcy protection in 2003 in Austin. Brian C. Nelson is listed as chief financial officer. The company's S-1 says the proposed maximum offering of its IPO is $275 million. Canaccord Genuity and Johnson Rice & Co. are listed as underwriters.

-- Jim Fuquay

An overview of U.S. shale plays

Powell Shale Digest has a one-page summary of production and well data for nine major U.S. natural gas and crude oil shale regions. It shows nearly 36,000 wells, with total production of nearly 23 trillion cubic feet of gas and 682 million barrels of oil and condensate from the Barnett, Fayetteville, Eagle Ford shales, and multiple areas of the Haynesville, Bakken and Marcellus shales. The data is free and the link is here.

(Editor's note: An earlier version of this post used a figure of "nearly 40,000 wells" from the original Powell Shale Digest report. The authors of that report later corrected the number.)

-- Jim Fuquay

Exxon not sweating low natural gas prices, XTO investment

Exxon Mobil Corp. doesn't appear to be too worried about its investment in XTO Energy or the future of natural gas, even dry natural gas.

In the company's quarterly earnings conference call with financial analysts Thursday David Rosenthal, Exxon's vice president of investor relations, was asked whether the company might write down the value of the reserves it acquired when it bought Fort Worth-based XTO in June 2010 for $25 billion.

The answer was pretty much, "No." Yes, Rosenthal said, domestic gas production was down and Exxon's was shifting most of its drilling focus in the U.S. to oil and gas fields with lots of potential for producing gas liquids.

"We are managing across the entire portfolio" and continuing to evaluate dry gas fields "while focusing on liquid areas," Rosenthal said.

But Exxon-XTO continues to drill some new dry gas wells to further evaluate and define the boundaries and potential of those fields.

Over the long term, Rosenthal said, Exxon still likes its natural gas holdings because our "outlook is that natural gas prices are not going to remain at this level."

Exxon is continuing to evaluate opportunities for exporting liquefied natural gas from its domestic U.S. fields.

- Bob Cox

Dallas energy company wins verdict in Eagle Ford dispute

Longview Energy, a small Dallas-based producer, sued a firm it accused of working with two of its directors to swipe an investment opportunity in the booming Eagle Ford Shale, and a Zavala County jury agreed. According to Law360, a legal news site, directors Bill Huff and Rick D'Angelo were among parties who directed Longview Energy to pursue properties in the Eagle Ford. But instead, Law 360 reported, "the jury found that Huff and D'Angelo breached their fiduciary duty to Longview when they took the corporate opportunities for themselves." The jury also found Huff Energy Fund L.P., a Longview shareholder, and Riley-Huff Energy Group were "responsible for knowingly participating in the directors' failure to comply with their duties." Longview Energy sought damages of $162 million -- $42 million for the current value of the properties and $120 million in past production revenues. Lawyers for the defendants said the amount due is $10.5 million -- the $162 million, minus the $24.5 million the defendants paid for the properties, minus the $127 million they spent developing the properties.

The Law360.com report is here (free registration required).

-- Jim Fuquay

Dallas Fed tracks Eagle Ford economic impact

The Federal Reserve Bank of Dallas takes a look at South Texas' Eagle Ford Shale in its latest issue of Southwest Economy. Economists at the Fed say the 23-county area has added more than 15,000 jobs since Jan. 1, 2010, and also has seen wages rise. The study is here.

-- Jim Fuquay

Study: Eagle Ford economic impact was $25 billion-plus in 2011

Oil and gas development in South Texas' Eagle Ford Shale added more than $25 billion in economic impact to the region, according to a new study by the University of Texas at San Antonio. The school's Center for Community and Business Research said the oil-rich formation supported 47,000 full-time jobs and provided $257 million to local governments. Also in the numbers were $3.1 billion in salaries and benefits and $358 million to state government. It predicts the field will be responsible for 117,000 full-time jobs by 2021. To see the study, click here. (This will open a dialog box to download a PDF file.)

-- Jim Fuquay