Goodrich Petroleum has signed an agreement to sell its reserves and leasehold in the Eagle Ford shale for $118million.
The move will see the company retain 58% of its undeveloped leasehold in the play for future development and sale.
The asset which is being sold produced an average of around 2,850barrels of oil equivalent per day during the first quarter of 2015.
Goodrich said it expects to book a gain of between $50-60million on the sale at closing.
President Robert Turnham said:”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.
“Acreage retention was an important aspect of this transaction for us as it allows for additional future value creation from the asset in what we believe will be an improved oil price environment.
“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. We continue to drive our well costs lower yet will remain conservative with our activity level, as we reiterate our full year capital expenditure budget of approximately $100 million, with sharply reduced capital expenditures in the last three quarters of the year.”