Devon Energy Reports Exceptional Q4

Company Slashes 2015 Spending by 20%
Devon Energy in the Eagle Ford

Devon Energy in the Eagle Ford

In its quarterly report, Devon Energy announced it finished an “outstanding year” as it rebounded from a $20 million net loss in 2013 to end 2014 with net earnings of $1.6 billion.

Devon’s fourth-quarter total production rose 20% to 239,000 barrels per day, which represents a 48% increase from 2013.

The report credits the Eagle Ford’s prolific wells for these record numbers. Devon Energy is active in over 82,000 acres in DeWitt and Lavaca counties in Texas.

Related: Devon Banking on High Returns from Eagle Ford Investment

“Devon delivered another exceptional performance in the fourth quarter, rounding out an outstanding year for the company, including a significant repositioning of the portfolio,” said John Richels, president and CEO.”

Looking to 2015, Devon has significantly reduced its capital budget for next year by 20% to $4.96 billion. The company plans to slash its spending in all areas except the Eagle Ford, including a 21% cut in exploration and production. The company predicts oil production will increase 20% to 25% in 2015 and they plan to operate on 13 rigs for 2015, as compared with more than 20 rigs last year.

Richels further comments that, “With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015.” 

In other Devon news, Chief Executive John Richels announced in December his plans to retire at the end of July. It is expected that their Chief Operating Officer, Dave Hager, will be named as his successor. Read more here.

Get the full report at devonenergy.com

Apache Corp Reports Q4 Losses

Company Plans to Operate 1-2 Eagle Ford Rigs in 2015

Apache Corporation LogoApache Corporation announced this week that it plans to reduce its Eagle Ford rig count from 12 (December) to four by the end of the month. Further reductions include plans to operate one to two rigs in the Eagle Ford during 2015.  These cuts are part of the bigger forecast for the company that includes a 70 percent reduction in rigs companywide.

Read more about Apache Corp. in the Eagle Ford

The company reported a fourth-quarter 2014 net loss of $4.8 billion compared to a profit last year of $174 million. Despite huge losses and future uncertainty, the report claimed that the company is exciting the year with “strong operational momentum”. Additional Apache news for 2015 includes a capital budget of $2.1 to $2.3 billion and estimated production to remain flat.

Related: ConocoPhillips Reports Q4 Losses

This announcement came only a few weeks after former Apache president and chief executive officer, Steven Farris stepped down from his position. The abrupt announcement on January 20, 2015 followed Ferris’ 25 years of service to the company. The new leadership faces tough decision in the midst of the current oil price uncertainty and where to focus its resources.

John J. Christmann IV, Apache’s chief executive officer and president. “Since our Nov. 20th North American Update, oil and gas prices have decreased substantially, prompting us to act quickly and decisively to reduce activity levels and reset our well cost structure.  We have reduced our rig count from an average of 91 rigs in the third quarter of 2014 to an estimated 27 rigs by the end of this month. We have also reduced our frac crews by approximately 50 percent during the same time period and are delaying some well completions until service costs decrease materially.”

Read full press release at apachecorp.com

Halcón Plans to Reduce Rigs for 2015

Revised 2015 Budget is Slashed for El Halcón
El Halcon Eagle Ford Play Map

El Halcón Eagle Ford Play Map | Click to Enlarge

Halcón Resources will reduce its rig count in the El Halcón in East Texas from three to one, according to the company’s press release on January 8th. This is the second round of cuts for the Houston – based company in less than two months with executives citing the continued decline in oil prices as the reason for the move.

Halcón’s spending for 2015 is projected at between $375 – 425 million, representing a steep decline from 2014 numbers of $950 million. Even with these drastic cuts, the company anticipates that production in 2015 will increase to an average of 40,000-45,000 barrels per day. This is compared to 43,554 b/d in the third quarter of 2014.

Read here for more about El Halcón

Halcon CEO Floyd Wilson says that, “Our plan is to deploy capital to assets where results indicate EURs and initial production rates higher than our published type curves. We are comfortable with our current liquidity position and we expect our strong hedge portfolio to continue generating income well into 2016. Although we are significantly hedged, the continued weakness in crude oil prices, combined with elevated service costs, calls for conservative planning. We expect to see these costs come down dramatically during 2015.”

Read the full report at halconresources.com.

Eagle Ford companies are still hiring. For more information go to jobs.eaglefordshale.com

 

Sanchez Reduces 2015 Capex by 60%

Company Will Cut Rig Count in Eagle Ford
sanchez reduces eagle ford rigs

2015 Sanchez Energy Capital Plan | click to enlarge

As oil prices hit new lows, Eagle Ford producers are scrambling to revise budget projections for 2015.

On January 7th, Sanchez Energy joined other companies who are forced to update 2015 capex projections from just two months ago. The company reports that the initial 2015 estimate of $1.15 billion will be slashed almost 60% to $400 – $450 million.

Related: Matador Reduces Eagle Ford Rigs in 2015

Related: ConocoPhillips Announces Capex Reduction in 2015

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, responded to the announcement by saying that due to “the deteriorating commodity price environment, Sanchez Energy has elected to further reduce its 2015 capital plan. Our 2015 drilling plan calls for us to move from 8 gross (7 net) rigs across our Eagle Ford position and 1 gross and net rig in the TMS in the fourth quarter of 2014 to 4 gross (3.5 net) rigs focusing on Catarina and Palmetto in the Eagle Ford and .25 gross and net rigs in the TMS. This represents an approximately 60% reduction in average rig count from fourth quarter 2014 to 2015.”

Despite the drastic cuts, the report predicts that the company will maintain 2014 Q4 production numbers. It is also expected that oil production will continue to rise in 2015 and should average 40,000 to 44,000 barrels a day.

Read complete report at sanchezenergycorp.com

ConocoPhillips Announces Capex Reduction in 2015

Budget Will Continue Targeting Eagle Ford and Bakken

This week Houston-based oil giant ConocoPhillips (NYSE: COP) announced its 2015 capital budget of $13.5-billion, a decrease of 20% over 2014. It’s a sign that major oil companies are taking lower oil prices seriously, but it doesn’t change the company’s focus in the Eagle Ford and Bakken Shale.

In 2015, about $5.0 billion will be allocated toward development drilling programs, compared to $6.5 billion in 2014. According to COP officials, Lower 48 development program capital will continue to target the Eagle Ford and Bakken, while significant investment spending will be deferred in emerging North American unconventional plays, including the Permian, Niobrara, Montney and and Duvernay.

Conoco officials also indicated the budget decrease is reflective of lower spending on major projects, several of which are nearing completion.

“We are setting our 2015 capital budget at a level that we believe is prudent given the current environment,” said Conoco’s CEO Ryan Lance. “This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength. We are fortunate to have significant flexibility in our capital program. Spending on several major projects has peaked and we will get the benefit of production uplift from those projects over the next few years. In addition, we identified inventory in the unconventionals, where we also retain a high degree of capital flexibility.”

Despite the cut, the company expects to produce about 3% more in 2015 from continuing operations, excluding Libya.

Read more at ConocoPhillips.com

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