Eagle Ford Spending Could Reach $30 Billion in 2014

Investment Will Propel Production Well Past 1 Million b/d
Eagle Ford Oil Production

Eagle Ford Oil Production | Click to Enlarge

Eagle Ford spending could stretch to new heights this year.

Eagle Ford oil production will surpass 1 million b/d early this year (combined oil and condensate production already has) and strong growth won’t stop there.

GlobalData expects development spending could reach as high as $30 billion. If that happens, Eagle Ford oil production won’t just reach 1 million b/d, it’ll blow right past it. Other research organizations estimate spending somewhere in the $20-25 billion range.

If spending ends up closer to $20 billion, it will tie directly to cost savings the industry is capturing across the board and not necessarily due to less activity. [Read more…]

BHP Lowers Eagle Ford Capital Spending For Fiscal Year 2014

Eagle Ford Becomes BHP Petroleum's Largest Producing Field at ~90,000 boe/d
Petrohawk Eagle Ford Shale Map

Hawkville Seen Here Extends into Webb County | Click to Enlarge

BHP touted the strength of the Eagle Ford in its year-end results, but also announced plans to lower capital spending in the play to a little more than $2.9 billion over the next twelve months.

BHP’s fiscal year 2013 ended on June 30th, so the company is reporting year-end results.

BHP is lowering its onshore U.S. oil & gas spending from $4.8 billion in fiscal year 2013 to $3.9 billion in fiscal year 2014. Approximately 80% of spending was allocated to the Eagle Ford and Permian in 2013 and approximately 75% of spending will be allocated to the Eagle Ford in 2014. The remaining 25% of drilling activity will be allocated in the Permian Basin and Haynesville Shale.

Approximately 75 per cent of operated drilling activity will be focused on our liquids rich acreage in the Eagle Ford.

At times over the past couple of years, BHP has had as many as 30 rigs running in the Eagle Ford, but plans call for 19 rigs in fiscal year 2014. This doesn’t necessarily mean fewer wells will be drilled. While the company isn’t as vocal about its operations, there is no doubt wells are going down much faster today than in years past. The company noted as much back in mid-July:

“An improvement in drilling productivity is expected to facilitate a reduction in our rig count in the 2014 financial year, while a lower level of capital expenditure for Onshore US will be increasingly focused on our liquids rich acreage in the Eagle Ford.”

BHP produced a little more than 32 million boe or close to 90,000 boe/d from the Eagle Ford in fiscal year 2013.

BHP has completely suspended drilling the Fayetteville Shale. Read the company’s full press release at bhpbilliton.com

SM Energy Increases Eagle Ford Completion Guidance – Adds Eaglebine Acreage

Will Complete 20 More Wells At Same Level Of Investment
SM Energy Eagle Ford Map

SM Energy Eagle Ford Map | Click to Enlarge

SM Energy has raised full-year, company-wide production guidance by 10% to 47.9 mmboe. The increase is largely due to impressive performance in the Eagle Ford.

Operated Eagle Ford production volumes increased 28% from the first quarter to the second quarter. Operated production in the play averaged 66,100 boe/d and non-operated production averaged 17,400 boe/d for a total of 83,500 boe/d net.

SM also increased its Eagle Ford completion guidance from 75 to 95 for the full year. Better yet, the company isn’t increasing its planned capital outlay. That means they’ll bring 20 wells to production at the same level of investment previously announced. That’s the kind of win-win every operator is looking for. [Read more…]

Carrizo Expects The Eagle Ford To Drive Oil Production Growth Higher

2013 Oil Production Growth Guidance Raised To 40% From 28%
Carrizo Oil &Gas Eagle Ford Well Pad Map

Carrizo Oil & Gas Eagle Ford Well Pad Map | Click to Enlarge

Carrizo Oil & Gas raised oil production growth guidance from 28% to 40% earlier in the summer due to improving well results in the Eagle Ford.

The company also raised second quarter oil production guidance from ~9.800 boe/d to ~11,000 boe/d. That represents and increase of more than 12%. There were a few factors that led to the increase:

“Key drivers of the outperformance have been flatter-than-expected decline rates from new wells in a number of areas, successful results from artificial lift installations and less well downtime than expected.”

Oil production is outperforming expectations, while gas and NGL production is coming in at the high end of guidance. Carrizo increased its company-wide growth target from 6% to 10% for the year.

Carrizo is running three rigs in the Eagle Ford, one in the Niobrara Shale, and one in the Marcellus Shale. Along with production guidance, Carrizo increased its capital spending plans by ~$35 million to $530-540 million in 2013.

In the Eagle Ford Shale, Carrizo is increasing planned 2013 drilling activity by three wells as a result of increases in drilling efficiencies, and increasing planned completion activity by 35 net frac stages primarily for lease management purposes.

Read the full press release at crzo.net

Eagle Ford Capital Spending Makes the Play the Largest in the World

Eagle Ford Spending in 2013 Will Rival the Median Country's GDP
Eagle Ford Capital Expenses

Eagle Ford Capital Expenses 2013 | Click to Enlarge

Did you know? The Eagle Ford now ranks as the largest single oil and gas development in the world based on capital expenditures. That means more will be invested in the South Texas oil play than any other single oil and gas development in the world! That’s the headline takeaway from a recent report released by Wood Mackenzie Analyst Callan McMahon.

The report notes that BHP, ConocoPhillips, and EOG Resources have a combined value of more than $30 billion in the Eagle Ford. That number likely doubles when you add other large players like Anadarko, Chesapeake, Lewis Energy, Marathon Oil, Murphy, Pioneer, and Talisman. If natural gas prices recover to more than $5/mmbtu, it’s quite possible more than $100 billion in value has been created by operators across the Eagle Ford. [Read more…]

Talisman Energy Sets 2012 Eagle Ford Shale Budget – $500 Million

Talisman Energy expects to spend more than US$4 billion in 2012 and spending in the liquids-rich Eagle Ford Shale play will increase from $350 million in 2011 to $500 million. The company operates 10 Eagle Ford drilling rigs currently and plans to ramp up to 14 by the end of 2012.

The increase in spending in South Texas comes on the back of a decrease in spending across North America. Talisman will spend $1.8 billion in North America in 2012 versus $2.2 billion in 2011. The cut is largely the result of less activity in dry gas plays that are challenged in the current $3/mmbtu natural gas environment. The company expressed a belief that natural gas prices will remain at depressed prices for some time. [Read more…]