When Houston-based Sanchez Energy Corp. learned in mid-2012 that Hess Corp. would divest its Eagle Ford acreage, it was quick to the data room. Sanchez Energy was less than two years out from a November 2011 initial public offering (IPO), but had assembled a seasoned technical staff as the company focused on unconventional oil, an arena populated by larger, well-capitalized firms.

Sanchez developed decline curves, a production profile and reached an in-depth understanding of the Hess acreage. In February 2013, Sanchez’s $280-million bid beat out competitors, landing 43,000 acres, 13.4 million barrels of oil equivalent (BOE) in proved reserves, and 4,500 BOE/d in production in Dimmit, Frio, LaSalle, and Zavala counties.

The South Texas parcel lacked the critical mass to become a second core for Hess, and the integrated firm exited the Eagle Ford at a substantial loss. For Sanchez, the transaction was transformational.

“We were long on running room,” says chief executive Tony Sanchez, III. “At the time we had 95,000 acres and 30 producing wells and we needed more reserves, production and current cash flow. The Hess asset fit perfectly.”

The acquisition doubled Sanchez’s well count and production volumes, strengthening the newly public company’s balance sheet. In July 2013, Sanchez bolted on a $29-million purchase in the northeast Eagle Ford adjacent to its Marquis holdings in Gonzales, Fayette, and Lavaca counties, bringing its Eagle Ford holdings to 140,000 net acres.

Both transactions reflect a maturing Eagle Ford as operators settle in to developing acreage positions in the post-land-grab era. At $1.5 billion, the shale led all regions in second-quarter 2013 deal flow.

“There is still some healthy competition going on,” says Joe DeDominic, chief operating officer at Sanchez. “But everyone realizes the land grab is over. You’ve high-graded the areas that are good, middle-of the-road and bad, so to speak, and people are focused on becoming more efficient. To do that you want to block up your acreage, you want to control your operations and you don’t want to deal with lease expirations, so there is still trading on the land side to fill out units.”

Oil and gas operators spent $19 billion in announced Eagle Ford transactions since 2010, trailing only the Permian Basin. Transactions range from billion-dollar-plus joint ventures in the early Eagle Ford to $680 million in assets in the most recent case, the July 2013 Chesapeake Energy Corp. divestment of 55,000 net acres in Zavala, Dimmit, Frio, and LaSalle counties to Exco Resources Inc.

Eagle Ford joint ventures (JVs) alone totaled more than $7.5 billion since 2010, with two-thirds allocated to drilling carries.

J.D. (Joey) Hall, senior vice president, South Texas operations at Pioneer Natural Resources Co., acknowledges the critical role JVs played in Eagle Ford development. “The early phases of a resource play are capital intensive, but your cash flow and revenue from production is minimal because you are ramping up,” Hall says. “Pioneer is very specific in wanting to operate within cash flow and we couldn’t have done that any other way without a JV.”

That partnership dates to July 2010, when Pioneer inked a $1.3-billion JV with India’s Reliance Industries and Mexico’s Newpek LLC, split 46.54% Pioneer, 45% Reliance and 8.46% Newpek. It was the first of the billion-dollar-plus Eagle Ford JVs.

By year-end 2010, the Eagle Ford had witnessed a flurry of JVs totaling $5.6 billion, including $2.1 billion on behalf of CNOOC International Ltd. and Chesapeake Energy Corp.

As the smoke cleared early in 2011, large-scale foreign investment in the Eagle Ford included the $1.55-billion JV between Korea National Oil Corp. and Anadarko Petroleum Corp., and $2 billion in a series of acquisitions and joint ventures between Norway’s Statoil and Canada’s Talisman Energy Inc.

Transactions provided the investment to launch development of the capital-intensive Eagle Ford, played a role in creating core positions in the play, such as Marathon’s $3.5-billion purchase of Hilcorp properties in 2011, and are currently extending the boundaries of the play. Today, sellers are high-grading properties or monetizing assets to finance additional drilling.

Sanchez was producing 600 BOE/d when it went public in fourth-quarter 2011. The company is currently at more than 12,000 BOE daily and is guiding toward a 2013 exit of 15,000 to 17,000 BOE daily. The company’s three areas of operations span the core Eagle Ford and are prospective for black oil, volatile oil, and gas condensate.

“For us, drilling locations are not so much the issue right now,” Sanchez says. “It’s high grading the best wells, which will provide the best rate of return. In straight math, we have upwards of 1,500-plus locations. We’ll drill 47 this year, 60 next year, so you get 15 to 20 years of inventory.

“Locations are not the problem. What we are focused on is drilling locations that provide the best rate of return. How quickly can we recycle capital? For well number 1,000, you may have a 20% rate-of-return location, but we have many more in front of that well that are 40 or 50%.”

Acquisitions allow Sanchez to replace lower-return wells deep in inventory with higher-return wells that can be drilled quickly, add proved reserves and impact the company’s profile for investors who look at Sanchez as a growth story.

So what’s down the road for Eagle Ford transactions?

Deal flow has slowed in the northeast Eagle Ford extension following Penn Virginia Corp.’s April 2013, $401-million purchase of Magnum Hunter Resources properties.

“It seems like deal flow is a little bit less than what we have seen in the past,” says John Brooks, executive vice president for operations at Penn Virginia. “We’re focused on a particular area, so I’m looking at the northeast part of the trend in Gonzales and Lavaca counties and filling in some white space in and around our leasehold and doing some joint ventures with other entities to round off corners and generate drillable locations where they might not exist otherwise.”

Carrizo Oil & Gas Corp. has also witnessed slower deal flow in LaSalle County to the southwest of the Eagle Ford core but expects opportunities to arise in the future.

“If you look at who is drilling in the Eagle Ford, 60% of rigs are either the integrated or large-cap E&Ps, so there is a pretty decent chunk of activity in leases that are held by smaller companies,” says Andy Agosto, vice president for business development at Carrizo. “Somewhere down the road those will become acquisition opportunities for larger companies.”

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