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A Step Back From Endless Financial Monotony: Marathon Acquires Hilcorp


Run a Hilcorp Marathon google search and you will become inundated with analyst ratings and metrics for the acquisition.  Allow me to give you the highlights, $3.5B for 141k net acres.  This comes out to about $25,000/acre, a new standard for Eagle Ford acreage for sure.  Hopefully, all the DI users out there used their Drillinginfo and HPDI accounts to further analyze this acquisition.  Whats that?  How would one do this?  Well I spent a small fraction of my afternoon putting this post together to show a couple ideas on  how this could be done.

First, some background.  Understand that this is not Marathon’s virgin entry into the Eagle Ford.  That occured last November with a deal they struck with Denali Oil & Gas.  See here.  That acreage was in Wilson and Atascosa counties.  That acreage is by all educated guesses firmly in the oil window.  This is in stark contrast to the newly acquired Hilcorp acreage of which most is situated in Karnes County and sits in the gas-condensate window.  Our analyst team at DI-ESP began following this area in late 2009 and dubbed the area “Sugarkane Corridor”.  The Conoco and Geosouthern wells appeared to be, arguably, the best in the trend.  Not only were they bringing in 500-1000 barrels of liquids per day, but well over 3 MMcf/D of rich gas to boot.

Back to the point of this entry.  What can Drillinginfo’s suite of products show you about the deal that you have not seen from typical google searches?  First, here is a slide showing Marathon’s relative position from both acquisitions.  I display Drillinginfo Landtracs in Karnes, Live Oak, Atascosa and Wilson counties.  I also layered 2011 permits from the top operators in the area to get a feel for who is operating in the area.  TX Crude Energy, I believe, had these drilling units intially before Hilcorp acquired some (or additional)  interest.  Hilcorp has been permitting on these units which is why I included them.


Secondly, I used HPDI to generate a quick chart showing production from the top operators in the area.  HPDI is great for quick, aggregation of production data.  I would venture to say it is the best in the industry.

Interesting takeaways include the ascension of EOG oil, and steep increases across the board after an initial period of relative flat-lining.

So, in conclusion, go ahead and read the endless financial murmurs that flood google.  But don’t sell yourself short, if you have a Drillinginfo and HPDI account, dont be afraid to dive right in and create your own analysis.  This took me barely anytime this afternoon.  Of course, if you are a DI-ESP client, we have detailed acreage positions, type curves, sequence stratigraphy and engineering data all at your fingertips as well.  FINALLY, always check back to this blog.

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