EOG Resources Inc. (NYSE:EOG) is divesting acreage in the Texas Panhandle with existing production and potential for further development.

Meagher Energy Advisors is assisting with EOG's sale of 8,500 net acres including production from 28 existing wells within the defined Tonkawa play in Hemphill County, Texas.

The sale includes high working interest and operational control on acreage that is mostly contiguous and held by production from vertical wells. An estimated 2,100 net acres are non-developed with 78.1% net revenue interest (NRI). Lease expirations are not an issue.

Existing Assets

Wells

1 horizontal/27 vertical

EOG operated

27 wells

Targeting

Tonkawa/Douglas/Morrow

Average interest

98.68% WI/77.07% NRI

Gross production for October 2013

52 oil/15 NGL/643 Mcf barrels per day

Net Sales for October 2013

40 oil/12 NGL/495 Mcf barrels per day

PV10

$6.58 million proved producing

Operating cash flow for October 2013

$172,551 net

Features of the Tonkawa development include abundant subsurface well control and reduced geological risk and need for pilot holes. There is a potential development program for three horizontal wells per section with the primary target the Tonkawa Sand at an average depth of 7,700 feet and thickness between 30 and 40 feet.

Identified upside potential consists of 37 horizontal Tonkawa locations with expected recovery of 303,000 barrels of oil equivalent (BOE) per well. The expected cost for completed wells is $4 million. Potential exists for future waterflood development with associated tax credits.

Bids are due Feb. 21 with closing expected March 28. The sale will have an effective date of Feb. 1. For information, contact Teri Williams, Meagher chief operating officer, at 918-481-5900 ext. 224.