Goodrich sells proved reserves, piece of Eagle Ford leasehold in $118 million deal

Independent oil and gas producer Goodrich Petroleum said Monday it’s selling to an unidentified buyer its proved reserves and associated leasehold in the Eagle Ford Shale for $118 million.

The Houston, Texas-based company is retaining approximately 58% (roughly 17,000 acres) of its undeveloped leasehold in the play in Texas’ LaSalle and Frio counties for future development or sale, Kallanish understands.

Assets being sold produced an average of roughly 2,850 barrels of oil-equivalent per day (BOE/d, approximately 75% oil) during the first quarter.

The company said it expects to book a gain of roughly $50-60 million on the sale at closing, with the funds used to pay off its bank revolver, retaining the difference in cash.

“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,” said Robert Turnham, Goodrich president. “The ability to pay off our bank debt and book the difference in cash in this difficult commodity cycle is an obvious benefit of the transaction as well.”

Turnham added Goodrich continues to drive its well costs lower, but remains conservative, with its full- year capital expenditure budget standing pat at roughly $100 million, with “sharply reduced capital expenditures” in the last nine months of 2015.

Citigroup Global Markets advised Goodrich on structuring the transaction. The effective date of the deal is July 1, with an expected closing date of Sept. 4.

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