Natural Gas Production Soars in U.S.

Record Low Storage Levels Persist Despite Increased Production
EIA Dry Shale Gas Production

EIA Dry Shale Gas Production | Click to Enlarge

Natural gas production in the U.S. was the best it’s ever been in April of 2014 according to estimates from Bentek Energy, an energy market analytics company based in Denver, CO. Production for the onshore Lower 48 last month averaged 67.3 Bcf/d, which was about .5 Bcf/d higher than March of 2014 production levels of 66.8 Bcf/d.

In 2014, Bentek predicts that average U.S. production for natural gas will be 67.5 Bcf/d, due in part to a higher overall price environment for producers and continued growth in liquids-rich plays like the Eagle Ford Shale and dry gas plays like the Marcellus Shale.  Currently, natural gas is trading at 4.53/mmbtu, which is a higher price point than some analysts expected due to the increased production volumes.

Jack Wiexel, Bentek director of energy analysis, said in a company statement,”natural gas producers are enjoying a relatively robust price environment despite substantially increased output the past two months.”

Despite the increase in production, the natural gas market is facing record low storage levels. While the EIA predicts storage build for the upcoming injection season (Apr – Oct) will be record breaking, total Lower 48 end-October inventories in 2014 would still be at their lowest level since 2008.

Wiexel said, “U.S. consumers need the production levels seen in March and April to continue throughout the summer to avoid high prices in the winter.”

Natural Gas Production in the Eagle Ford

Not surprisingly, gas to oil ratios (GOR) indicate there is a greater focus on oil in the Eagle Ford, but since significant activity began in 2009, there has also been a tremendous spike in natural gas production. According to the Energy Information Administration (EIA), gas production in the Eagle Ford accounted for nearly 4,000 MMcf/d in June of 2013, compared to only 5.8 MMcf/d in 2009. The Eagle Ford accounts for about 5% of total natural gas production in the onshore Lower 48.

Cabot Completing First Six-Well Pad in Eagle Ford in 2014

Four Well Pads Come Online in Eagle Ford at Average Peak 24-hour Rate Per Well of 885 boe/d
Cabot Eagle Ford Drilling

Cabot Eagle Ford Drilling | Click to Enlarge

Cabot’s first four-well pads in the Eagle Ford came online during the fourth-quarter of 2013 and produced an average peak 24-hour rate per well of 885 boe/d.

The company had record production in 2013 of ~412 bcfe or 1.13 bcfe/d, an increase of 55% over 2012. Also, the company’s longest lateral well (8,708′) came online in the Eagle Ford in 2013. The well was completed with 31 frac stages, and reached a peak 24-hour rate of 1,344 boe/d (92% oil).

 

Read more: Cabot Oil & Gas More Confident in the Eagle Ford and Pearsall

[Read more…]

Carrizo Oil & Gas Plans Big Spending in the Eagle Ford

77% of the Company's $500 Million Budget is Planned for South Texas
Carrizo Eagle Ford and Pearsall Map

Carrizo South Texas Eagle Ford Map | Click to Enlarge

Carrizo Oil & Gas has allocated $385 million of its $500 million development budget to drilling & completing wells in the South Texas Eagle Ford. The company plans to keep three rigs running in the play throughout 2013. [Read more…]

Carrizo Oil & Gas Eagle Ford Reserves Up 90% – 2011

Carrizo Eagle Ford Shale Map

Carrizo Map | Click to Enlarge

Carrizo Oil & Gas announced year-end results along with updates from the company’s development in oil plays.  Eagle Ford Shale reserves increased 90% year over year from 15 mmboe to 28.5 mmboe.

Carrizo’s 41,000 acres is primarily located in the gas condensate window, of La Salle and McMullen counties, where expectations are for a production stream of 75% liquids and 25% rich gas. Oil in the area is selling at an average of $4 better than NYMEX prices, so even with infrastructure constraints we’re seeing the benefits of proximity to the Gulf Coast refining complex. [Read more…]

Shell’s Production Growth Focused in North America

Shell’s Eagle Ford Shale assets will undoubtedly be a major part of the company’s guidance to grow production by 25% by 2017-2018. 80% of Shell’s capital budget will be spent on upstream development and 60% of that will be spent in North America and Australia. The company’s largest North American development areas are in the Pinedale Field of Wyoming, Eagle Ford Shale of South Texas, and the Marcellus Shale of the Northeast U.S.

Voser commented: “We have worked hard to generate a strong pipeline of investment opportunities for Shell, and we put the emphasis firmly on a competitive financial performance. Shell’s investment programmes create cashflow growth, which in turn funds our dividends. All of this is supported by efficiency gains from our continuous improvement programmes, where the opportunity set runs to billions of dollars for Shell.” [Read more…]

Chesapeake’s Operating Plan | Natural Gas Loss = Eagle Ford Gain

Chesapeake Energy is planning to reduce the company’s natural gas rig count across the U.S. and shut in natural gas production in response to low prices. The operated, dry gas, rig count will decrease by 50 rigs to 24 in 2012 from 75 in 2011. The company is also shutting in production of 0.5 Bcfd. That’s a little less than 1% of U.S. supply, but it’s a good start in helping remedy $2 natural gas prices.

The rigs will be moved to liquids-rich areas that are supported by more valuable oil, condensate, and NGL production. The Eagle Ford is a likely beneficiary. While the change shouldn’t be substantial, don’t discount the value of the play’s liquids production in times of low gas prices. Chesapeake is likely one of many that will make similar moves. [Read more…]

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