SAN ANTONIO—Since the rise of the Eagle Ford Shale and its A&D peak in 2013 and 2014, the play has matured—E&Ps hold large acreage positions, core areas have been defined and the pace of transactions may have lost a step.

While the Permian has been the desired basin for buyers lately, the more established Eagle Ford’s resources still give it a silver fox appeal. A&D will continue, just at a more relaxed clip, panelists said Nov. 16 at Hart Energy’s DUG Eagle Ford conference.

Stable commodity prices are a key, panelists said, as are small-cap E&Ps and private-equity buyers looking for less expensive prospects with solid returns. That will lead them away from the Permian and Stack/Scoop and toward the Eagle Ford Shale for deals.

Panelist Chip Simmons, CEO of Titanium Exploration Partners LLC, said his company will be active in pursuing deals, but for the larger industry “I would expect to see a more moderate pace given the maturity of the play and all the positions that have already been staked out.”

While the Eagle Ford has posted a solid first nine months in 2017, that’s largely due to one outsized deal: Sanchez Energy Corp. (NYSE: SN) and private-equity partner Blackstone Energy Partners’ deal to buy western Eagle Ford Shale assets from Anadarko Petroleum Corp. (NYSE: APC) for $2.1 billion.

In the third quarter, by contrast, five deals were announced totaling $698 million—an average of less than $140 million per transaction.

Rusty Shepherd, managing director for RBC Richardson Barr, told the DUG audience that in the Eagle Ford key mid- and large-cap companies will also play a role in deal making.

“I would suspect [companies] are either holders or sellers depending on the amount of inventory they have in the play at this time and the other inventory concerns and considerations they have in their portfolio,” he said.

Underscoring that point, Comstock Resources Inc. (NYSE: CRK) is selling about 18,600 net acres in the Eagle Ford Shale, Geoff Roberts, managing director and head of U.S. A&D for BMO Capital Markets, said at an earlier panel Nov. 16.

Comstock said in early November it planned to sell the assets in an effort to pay down debt. Seaport Global Securities analysts said in a Nov. 15 report the asset is expected to sell for between $200 million and $300 million. Third-quarter net production average 2,866 barrels of oil equivalent per day, 70% oil, from about 190 wells.

Shepherd said the Comstock acreage fits into a private-equity buyer’s world.

“That middle market space is sort of active right now and right sized for the opportunity set,” he said.

Private-equity companies will look to continue to expand their holdings in the Eagle Ford along with small cap public companies.

“The question becomes when does private equity then start go into sell mode and at what point in time does that happen and who is their transaction party long term,” he said. “I don’t believe that’s a 2018 question. I think it’s a 2019 question.”

Panelist Martin Thalken, chairman and CEO of Protégé Energy III LLC, which is backed by private-equity firm EnCap Investments, said he sees an opportunity for Eagle Ford players to become larger through consolidation.

“There is a lot of private equity looking at the Eagle Ford, but the private-equity companies typically have plans to enter, develop, create value and exit,” he said. “And there aren’t that many that look at a public company IPO as an exit.”

The tightening of capital markets has been of benefit to private equity in general, he said.

“The good thing today about private equity is it's readily available and it’s hungry for assets,” he said. There’s less competition from the public [companies] in acquiring quality assets that us private equity companies are pursuing.”

However, Thalken said deal flow appears to be stagnant. Asked whether the Eagle Ford represents a buyer’s or seller’s market, he answered neither “because no one is buying.”

Shepherd disagreed, saying he sees a market in which buyers and sellers have reached a rare point at which they agreed on the price of crude oil and natural gas.

That détente is “the first time we’ve had true consensus among buyers and sellers in a long time,” he said. “I think private equity has backfilled the demand side of the equation. They’ve been shut out of the Permian, shut out of the Scoop/Stack from an operator perspective. So they look at the next best returns that are available to them.”

With so much capital to put to work, private-equity teams see the “Eagle Ford as a natural home for that capital.”

Roberts noted that buyers have allocated value to proved-developed-producing assets and most Lower Eagle Ford development locations. Most potential acquirers are also paying for larger completions and longer laterals, even when a seller hasn’t demonstrated recent results for such techniques.

Shepherd, like Roberts, said RBC has had as many as 20 offers on Eagle Ford assets.

“It’s having the right asset; that’s what the market is looking for. That is really driving that efficiency,” he said.

Darren Barbee can be reached at dbarbee@hartenergy.com.