Penn Virginia Corp. (NYSE:PVA) announced plans July 10 to acquire 11,660 net Eagle Ford Shale acres from multiple sellers in Lavaca County, Texas, for about $45 million.

The transaction, combined with recent leasing, will bring Penn’s total Eagle Ford acreage position to about 101,800 net acres, the company’s target. The acquired acreage is northeast of Penn’s Shiner area prospect and is estimated to offer about 150 gross potential drilling locations, most of which the company expects will be prospective in the Upper Eagle Ford Shale.

The purchase price, about $3,860 per acre, will be paid in two parts: $34 million at closing and the balance of about $11 million over time as a drilling carry.

H. Baird Whitehead, president and CEO, said the acquisition is an optimal fit with its current acreage position in Lavaca County and is believed to be primarily prospective in the Upper Eagle Ford Shale.

The asset could also have potential in the Lower Eagle Ford Shale and Austin Chalk.

Penn Virginia Eagle Ford Assets as of March 31

Acres101,800 net
Gross potential drilling locations1,600
Net wells to spud, 201465
Rigs running6, with plans to add another
YE13 Proved Reserves75.6 MMboe

PVA Eagle Ford Inventory

AreaProducing Wells
Shiner53
Peach Creek125
Rock Creek / Bozka22
Shallow / Hunt31

Penn recently announced results of the Welhausen #A-2H, which was completed in the Upper Eagle Ford Shale and produced 730 barrels of oil per day and 1,390 barrels of oil equivalent per day (boe/d) after almost two months of production.

Given investor and Wall Street skepticism about Upper Eagle Ford well economics, “we expect most remain focused on second-quarter 2014 results rather than potential NAV upside although a 1,390 boe/d Welhausen rate after 60 days helps,” said David Tameron, senior analyst, Wells Fargo Securities.

Whitehead said the company is increasingly confident about the Upper Eagle Ford potential across a large portion of our acreage position, including the acquired acreage.

“We will also hit our minimum corporate target of 100,000 net acres in the Eagle Ford Shale, and will continue to expand our position primarily through an ongoing leasing effort,” he said.

The sale is expected to close in August.

Penn is an independent oil and gas company engaged in the exploration, development and production of oil, natural gas liquids and natural gas in various domestic onshore regions of the United States, with a primary focus in Texas and other properties in the Mid-Continent and the Marcellus Shale in Appalachia.