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.