Clayton Williams May Reduce Eagle Ford Drilling Program – 2015

Q3 2014 Eagle Ford Production - 2,900 boe/d
Clayton Williams Eagle Ford Operations Map

Clayton Williams Eagle Ford Operations Map | Click to Enlarge

With the recent dip in oil prices, Clayton Williams indicated it may be scaling back drilling plans in the Eagle Ford in 2015.

Currently, the company is running a six rig program across its core areas, with three in the Eagle Ford and three in the Delaware Basin, and plans to continue drilling at this pace for the remainder of 2014. Based on this level of activity, the company expects combined oil and gas production for the fourth quarter of 2014 to average between 16,600 and 17,000 boe/d portfolio-wide.

By comparison, Clayton Williams estimates the same number of rigs in the Eagle Ford and Delaware Basin, would yield an average between 18,800 and 19,400 boe/d portfolio-wide in 2015. However, officials indicated in the company’s third quarter of 2014 report that a two rig drilling program may be considered in each area, which would reduce production by 1,300 boe/d.

In the third quarter of 2014, the Eagle Ford alone averaged approximately 2,900 boe/d, with a 94% oil cut.

Clayton Williams’ Eagle Ford Operations Update – Q3 2014

Currently, Clayton Williams has 22 horizontal Eagle Ford wells on its legacy Austin Chalk acreage block in Burleson, Robertson and Lee Counties, that have been on production for 30 days or more. The peak 30-day production rate for these wells has averaged 518 boe/d, with a 96% oil cut. Six additional wells have been on production for less than 30 days or are currently in various stages of completion, and three wells are currently being drilled. Typical drilling and completion costs in this area range from $5-million to $6-million per well, according to company officials.

Clayton Williams Testing Sequential Fracturing Operations and Well Densities

Clayton Williams is currently testing sequential fracturing operations and increased well densities, primarily in Burleson County, to help determine optimal spacing and fracturing design for future Eagle Ford development. Company officials say two adjacent wells were sequentially fractured with good early results, and there are plans for the fourth quarter to sequentially fracture a group of three adjacent wells.


Penn Virginia Upper Eagle Ford Production Taking Off

Full-Year Production Guidance Lowered Portfolio-Wide
Penn Virginia Eagle Ford Acreage Map

Penn Virginia Eagle Ford Acreage Map | Click to Enlarge

Penn Virginia Corp.’s second-quarter report revealed a decrease in its full-year production guidance portfolio-wide. Company officials cited operational complexities associated with pad drilling and the timing of completions as the primary reasons for the decrease.

Despite lowering its guidance, Penn Virginia’s second quarter Eagle Ford production was up 6% to 15,618 boe/d (75% oil cut), compared to 14,761 boe/d in the previous quarter. And Upper Eagle Ford production in the company’s Marl position has also been very positive, according to company officials.

Read More: Penn Virginia Acquires Eagle Ford Acreage – $45 Million

In June of 2014, Penn Virginia’s average Eagle Ford production was 16,861 boe/d (74% oil cut). The company’s average Eagle Ford production in July 2014 is estimated at 18,100 boe/d. Year-to-date, Penn Virginia has turned in line 43 (28.0 net) operated wells, excluding shallow wells.

Penn Virginia CEO H. Baird Whitehead, said in a prepared statement, “we have expanded our ongoing pad drilling program in the Eagle Ford and are encouraged by our recent results in the play, especially our results in the Upper Eagle Ford. We are modestly reducing our full-year production guidance, but we remain confident that we can deliver significantly higher production levels in the second half of 2014 as we realize the ongoing benefit of our pad completions and rig expansions along with an increased focus on the Upper Eagle Ford.”

Penn Virginia Upper Eagle Ford Update

To date, the company has tested three Upper Eagle Ford wells, including the Welhausen #A2H, which had an initial production (IP) rate of 2,165 boe/d. At the release of this post, the Welhausen #A2H average rate is 1,070 boe/d, since being turned to sales in March of 2014.

Company officials believe the Upper Eagle Ford and Lower Eagle Ford are separate reservoirs in the specific areas around the three Upper Eagle Ford test wells. According to company officials, this theory has been based on performance comparisons between adjacent Lower Eagle Ford wells to the Upper Eagle Ford test wells. Penn Virginia plans to spud 19 additional Upper Eagle Ford wells, with eight scheduled in the Welhausen area.


Cabot Oil & Gas To Expand Eagle Ford Drilling Program

Cabot Seeks to Increase Eagle Ford Acreage Position
Cabot Oil & Gas Drilling Program

Cabot Oil & Gas Drilling Program

After seeing positive results in the Eagle Ford over the past six months, Cabot Oil & Gas plans on expanding its Ealge Ford drilling program in the third-quarter of this year. Company officials cite continued improvements in production and cost savings as the primary reasons for the decision to expand their drilling program.

Like may other Eagle Ford operators, Cabot is seeing positive results from pad drilling. In the first quarter, the company completed its first six well pad with an average lateral length of 6,658′. The wells achieved an average peak 24-hour initial production (IP) rate of 1,045 boe/d per well (89% oil) during their first ten days online. Currently, the company is drilling a five-well pad with a planned average lateral length of over 8,500′.

Cabot CEO Dan Dinges, said, “”we have been very pleased with the strides our Eagle Ford team has made over the last six months. Based on the continued improvement in production rates and realized cost savings, which have resulted in higher rates of return, we are adding a third rig to our Eagle Ford program beginning in the third quarter. This additional rig will be focused on multi-well pads and is expected to have minimal impact on 2014 production but will materially impact our estimated 2015 oil production volumes.”

Read more: Cabot Completing First Six-Well Pad in Eagle Ford in 2014

Cabot’s Eagle Ford First-Quarter Update

During the first quarter of 2014, Cabot netted 7,271 boe/d, a 42% increase compared to the same reporting period last year. Total net production included 6,839 bbl/d of liquids, which represented a 49% increase. Also during the first quarter, Cabot added approximately 4,000 net acres to its Eagle Ford position through its leasing efforts.

In April of 2014, the company revealed that it intends to increase its position in the play. Before the end of the year, the company will almost assuredly strike a deal for more Eagle Ford acreage. Currently, Cabot has ~66,000 net acre across the play, with properties principally located in Atascosa, Frio, La Salle and Zavala Counties, Texas.


ZaZa Energy Continues Laying Groundwork for Eagle Ford Growth

ZaZa Energy CEO Takes $1 Dollar Salary for Two Years
Eagle Ford & Eaglebine Map

Eagle Ford & Eaglebine Map | Click to Enlarge

ZaZa’s first quarter 2014 average combined production in the Eagle Ford (South Texas) and Eaglebine (East Texas) was 630 boe/d. The company has re-focused its attention to the Eaglebine, after divesting 10,300 net Eagle Ford acres in July of 2013 to a subsidiary of Sanchez Energy for $28.8 million. Approximately 82% of ZaZa’s first quarter production came from the Eaglebine.

Read more: ZaZa Selling Eagle Ford Assets to Sanchez Energy For $28.8 Million

During the first-quarter, the company continued to position itself for growth across its portfolio. In May of 2014, ZaZa announced that its CEO, Todd Brooks, will be taking a salary of $1 dollar for the next two years. During that time frame, Brooks’ compensation will consist of equity grants or other equity-related compensation.

[Read more…]

Penn Virginia Seeks to Expand Eagle Ford Position

Penn Virginia Acquired 6,400 Net Acres in First Quarter of 2014
Penn Virginia Eagle Ford Operations Update - Dec 2013

Penn Virginia Eagle Ford Operations Update – Dec 2013 | Click to Enlarge

During the first quarter of 2014, Penn Virginia added 6,400 net acres at a cost of $3,000 per acre, and in January, the company sold its Eagle Ford Shale natural gas gathering assets for $100 million in-part for reinvestment in the play.

Penn Virginia currently has 125,300 gross acres (85,900 net) in the Eagle Ford, and anticipates on growing its acreage to a minimum of 100,000 net acres.

CEO H. Baird Whitehead said, in a company statement, “due to continued success in adding to our Eagle Ford Shale acreage position, we are increasing our leasing capital expenditures guidance for the year.”

It can be assumed with great confidence that Penn Virginia will strike a deal for more Eagle Ford acreage in the very near future.

Read MorePenn Virginia Sells Eagle Ford Midstream Assets to ArcLight Capital

Penn Virginia Eagle Ford First Quarter Operations Update

Penn Virginia’s Eagle Ford production was up 15% quarter over quarter, from 13,145 boe/d to 15,152 boe/d at the end of the first quarter of 2014. Eagle Ford production represented ~72% of Penn Virginia’s record breaking total production for the quarter of 21,133 boe/d.

During the quarter, the company saw positive results from two of its Upper Eagle Ford test wells in Lavaca County. One of the wells had an initial production (IP) rate of 2,165 boe/d. Company officials say that the two wells have the highest wellhead flowing pressures they have seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 – 6,000 standard cubic feet per barrel.

Whitehead said, “initial testing of our adjacent Upper / Lower Eagle Ford Shale wells commenced in the first quarter and the initial results are strong. We saw initial production in excess of 2,000 BOEPD with a very high flowing pressure. Longer term testing will be necessary in order to fully understand the upside associated with the Upper Eagle Ford Shale, but we are very optimistic about the play.”

Penn Virginia estimates in both the upper and the Lower and the Upper Eagle Ford that approximately 1,510 gross drilling locations remain. Of that figure, 68% of those locations are prospective for the Lower Eagle Ford.

During the quarter, the company completed 16 (12.9 net) operated wells and participated in the completion of two (0.9 net) outside operated wells. At the end of the quarter, the company had a total of 19 (11.1 net) wells completing or waiting on completion and six (3.4 net) wells being drilled.


Halcón Resources Focused on El Halcón Area Sweet Spots

Current Production Approximately 10,400 boe/d in El Halcón
Halcon Resource's Eagle Ford Acreage Map

Halcon Resource’s Eagle Ford Acreage Map | Click to Enlarge

In its first quarter 2014 report, Halcón Resources made the claim that its entire East Texas El Halcón area is “de-risked and repeatable”. That may sound a little like a sales pitch, and likely, it is. Halcón Resources CEO, Floyd Wilson, has indicated within the last year that a sale of the company wouldn’t be out of the question. For the time being however, no definitive or official statements have been made by Halcón Resources, but it sounds like a nice bow is being wrapped around the company for a potential buyer.

During the first quarter, Halcón further strengthened its Eagle Ford position by divesting some of its’ non-core East Texas properties, and in a separate transaction in March 2014, the company acquired nine wells in El Halcón from Aresco LP. The purchase price of the wells was undisclosed.

[Read more…]