ConocoPhillips’ Eagle Ford production hit a peak of 103,000 boe/d at one point during the fourth quarter of 2012. The company announced earnings on January 31st and highlighted the milestone on the quarterly call.
Annualized Eagle Ford production was 70,000 boe/d for 2012, but stretched to more than 100,000 boe/d in the fourth quarter (89,000 boe/d Q4 average). The company utilized a peak of 17 rigs early in 2012, but lowered its rig count in the face of operational improvements that increased drilling speed. The backlog of drilled yet not completed wells simply grew over the year. Completion crews and gathering pipelines simply weren’t able to keep up with the rigs. ConocoPhillips (COP) has 11 rigs running as of January 2013.
In 2012, COP drilled 211 operated wells and now has over 310 wells producing. The company’s current backlog of Eagle Ford wells is almost 90 drilled and waiting on completion, as well as almost 50 wells drilled and completed that are awaiting pipelines. Here’s a direct quote from the company’s operations update for the Lower 48 and Latin America:
Fourth-quarter production was 475 thousand barrels of oil equivalent per day (MBOED), an increase of 31 MBOED compared to the same period of 2011. Significant growth continues from the ramp up of core shale plays in the Eagle Ford and Bakken. For the quarter, these shale plays delivered approximately 113 MBOED, a 71 percent increase compared to the fourth quarter of 2011. During the quarter, Eagle Ford averaged 89 MBOED, achieving a peak daily rate of more than 100 MBOED, while Bakken averaged 24 MBOED….
Conoco’s Eagle Ford Leases Held By Production?
Conoco is also working to establish quicker access to pipelines where the company can directly negotiate sales agreements. Also, stabilization facilities will be added in 2013 that allow the company to capture light ends of the hydrocarbon stream. Separating the light barrels will allow the company to meet pipeline specifications for a greater volume of Eagle Ford production. Both advancements should improve realized prices even further.
Even with all the good news, it wasn’t ALL roses. Production could have been even higher if it weren’t for higher than expected back pressure in natural gas gathering systems. Conoco expects the issue will be alleviated early in 2013.