On 3 January SM Energy announced the sale of its non operated Eagle Ford position to KKR backed Venado Oil and Gas LLC for US$800 million. The deal includes 37 500 net acres in the western Eagle Ford producing 27 270 net boe/d and a 12.5% interest in the Springfield Gathering System. It is the first large acquisition by the partnership between KKR and Venado which aims to build scale and a long term business in the play. This is an opportunistic acquisition for Venado. We estimate that the price attributable to the upstream assets was 20% below our commercial valuation. Future development depends on the operator Anadarko. Anadarko currently employs <1% of its US onshore capex in the play. However it is rumoured that Anadarko is marketing its position thus potential upside exists if a new operator comes in with a renewed focus on the play.