SM Energy Reaches Agreement to Divest Portion of Eagle Ford Shale Position
June 13, 2011 5:02 PM
SM Energy Company (NYSE: SM) announces it has entered into an agreement with undisclosed buyers to divest a portion of its Eagle Ford shale position. The position is a detached block of acreage that is comprised of the entirety of the Company's operated acreage in LaSalle County, Texas, as well as an immaterial portion of adjacent operated acreage in Dimmit County, Texas.
In total, approximately 15,400 net acres are being sold for cash proceeds of approximately $225 million. Due to limited infrastructure, there is currently no production associated with three wells that have been drilled on the acreage. As of year-end 2010, there was an immaterial amount of proved reserves booked for this acreage.
The buyers will be entitled to approximately 12% of the takeaway capacity associated with SM Energy's agreement with Eagle Ford Gathering LLC, a joint venture between Kinder Morgan Energy Partners, L.P. and Copano Energy, L.L.C. The sale is expected to close in August of 2011 and is subject to customary purchase price adjustments, closing conditions, and transaction fees.
