Pearsall Shale Acreage Worth $14,300?

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On June, 22 of 2012, Cabot Oil and Gas entered into a joint venture with Japan’s Osaka Gas Company that gives the company a 35% working interest in just over 50,000 acres in Cabot’s Buckhorn and Powderhorn areas. Osaka Gas Company effectively paid $14,300 for 17,500 acres.  Those fields are located in Frio, Zavala, LaSalle and Frio Counties. The partnership is for all zones below the Buda limestone. Essentially the Cabot – Osaka transaction is a Pearsall Shale deal, leaving Cabot Oil and Gas all rights to the Eagle Ford Shale.  The deal surprised many oil and gas analysts, especially since the Pearsall Shale is still basically an unproven play. Cabot listed production reports from neighboring wells near the Buckhorn operating area, centered on the LaSalle, Frio and Atascosa county line. Four nearby wells had IP rates of between 740 to 451 barrels per day of condensate and from 6.2 to 4.4 Mmcf/d of gas. Although there are no maps of the Pearsall shale “wet gas” and condensate zones to be found online yet, Cabot Oil’s Buckhorn area appears to be in the condensate zone.

Below is a map showing the location of the Buckhorn and Powderhorn operating areas. (Source, Cabot Oil and Gas investor presentation.)

cabot oil map pearsall shale

The following is a map of the Pearsall Shale formation, from a report published by the Bureau of Economic Geology at the University Of Texas. (Click on map to view full screen size.)

Map of Pearsall Shale thickness

EOG Resources has apparently drilled a wildcat Pearsall Shale test well in Wilson County, the Lang #11H, located 13.3 miles Southwest of Poth. No production reports have been issued yet by EOG.

The recent Pearsall Shale deal between Cabot Oil and Gas and Osaka Gas has many landowners with Eagle Ford Shale leases looking at their lease agreements. If your lease does have a depth clause, and is set to expire, you may want to have one in any future leases that you sign.