Newfield (NFX) is one of the first to show what I expect we’ll see from others later in the year.
NFX’s Eagle Ford production was down in the first quarter, BUT it will surge in the second quarter when well pads that are already drilled are completed.
Others will experience this as well. Pad drilling will make production profiles look much more choppy than they have been to date.
Newfield drilled six new super extended laterals from in the quarter and lowered its well costs by $400,000 per well to $7.8 million. Recent well costs have fallen to $7.7 million. That’s a good trend that will improve realized returns. The Eagle Ford is yielding returns that rank among the highest in the company.
The company is running two rigs and plans to drill most of its wells from common pads. Newfield produced approximately 5,200 boe/d in the fourth quarter of 2012, 4,830 boe/d in the first quarter of this year, and is expected to produce 7,000 boe/d in the second quarter of 2013. Newfield expects to exit the year producing approximately 14,000 boe/d.
Production growth is expected to be 75% in 2013 and 50% in 2014.
Read the full press release at newfield.com