Penn Virginia Invests in the Eagle Ford

96% of 2015 Spending Targets South Texas
Penn Virginia 2015 Q1

Penn Virginia 2015 Q1

Penn Virginia Corp. released its first quarter update last week, showing its Eagle Ford operations the big star.

Realated: Penn Virginia Upper Eagle Ford Production Taking Off

Since moving into the Eagle Ford in 2010, Penn Virginia has focused a great deal of its resources on the area. For the first quarter of 2015, the Eagle Ford accounted for 87% of the company’s production (21,390 BOEPD of 24,721 BOEPD). Looking ahead, 96% of 2015 spending will go towards Eagle Ford development.

Q1 Highlights

  • Total production increased 17% over the first quarter of 2014
  • 25% Decrease in Average Eagle Ford Well Cost Since Early Fourth Quarter 2014
  • Decrease for unit production costs: $10.68 per BOE from $11.52 per BOE.
  • Over the past 12 months, 23 Upper Eagle Ford wells have been brought on line
“While continuing to increase production, our primary focus has been on cutting well costs and improving our operational execution,” said H. Baird Whitehead, President and Chief Executive Officer of Penn Virginia, in a conference call following the release. “With 23 wells completed over the past 12 months, we feel that we have successfully de-risked the Upper Eagle Ford across much of our acreage and have achieved excellent average results.”

As of October 2014, Penn Virginia had approximately 145,500 gross acres in the Eagle Ford Shale play in Gonzales and Lavaca Counties, Texas.  Read more about Penn Virginia in the Eagle Ford

Read full press erlease at pennvirginia.com

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.

Read more at pennvirginia.com

Devon Banking on High Returns from Eagle Ford Investment

Lavaca County Acreage Performing Better than Expected According to Devon
Devon Energy Eagle Ford Acreage Map

Devon Energy Eagle Ford Acreage Map – 82,000 net acres | Click to Enlarge

After closing its $6 billion transaction with GeoSouthern for 82,000 net Eagle Ford acres at the end of February 2o14, Devon says its current net daily production in the play is 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Devon is banking on high returns from its hefty Eagle Ford investment, and so far, the company appears to be confident it will achieve a lucrative pay off.

Read moreDevon Energy Acquires Eagle Ford Assets from GeoSouthern for $6 Billion

At the UBS Oil & Gas Conference at the end of May of 2014, the company’s COO, David Hager, revealed the Lavaca County acreage is performing better than expected. Currently, the company has 300 total preliminary locations targeted in the county. In DeWitt County, the company has 900 preliminary locations targeted.

Hager, said, “when we acquired [the Eagle Ford acreage], we placed over 90% of the value from an internal standpoint on DeWitt County. We didn’t put as much value on Lavaca County initially []. What we’re finding is the results aren’t quite as good as DeWitt County, but there are a lot better than we originally anticipated.”

Recently, another Eagle Ford operator, Penn Virginia, revealed strong 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 for Penn Virginia said in a quarterly update that the two wells have the highest wellhead flowing pressures the company has seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 – 6,000 standard cubic feet per barrel.

Read morePenn Virginia Seeks to Expand Eagle Ford Position

In 2014, Devon will drill approximately 230 wells across its Eagle Ford acreage position. About 200 of those wells are slated to be drilled in DeWitt County under a 50/50 partnership with BHP Billiton. The other 30 wells are to be drilled in Lavaca County, where Devon has a 100% working interest in the majority of the acreage. Also in 2014, look for Devon to drill some Upper Eagle Ford wells.

Read more at Devon.com

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.

Read more at pennvirginia.com

Penn Virginia Grows Eagle Ford Position to 80,000 Net Acres in 2013

Penn-Virginia's Eagle Ford Shale Proved Reserves Increased 189% in 2013 to 75.6 mmboe
Penn Virginia Eagle Ford Acreage Map

Penn Virginia Eagle Ford Acreage Map | Click to Enlarge

Penn-Virginia’s Eagle Ford Shale proved reserves increased by 189% in 2013 to 75.6 mmboe (89% oil and NGLs). That’s ~55% of the company’s estimated total proved reserves.

The year-over-year increase in proved reserves was partially tied to a $401 million dollar deal in April 2013, when the company acquired ~40,600 gross (19,000 net) acres from Magnum Hunter Resources.

Read more: Penn Virginia & Magnum Hunter Deal Worth $401 Million

[Read more…]

Penn Virginia Sells Eagle Ford Midstream Assets to ArcLight Capital – $100 Million

119 Miles of Pipelines in Gonzales and Lavaca Counties Included
Penn Virginia Eagle Ford Operations Update - Dec 2013

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

Penn Virginia is selling its natural gas midstream assets in the Eagle Ford to an affiliate of ArcLight Capital Partners (American Midstream) for $100 million.

The deal includes gas gathering, a gas lift system, 119 miles of pipelines and associated facilities in Gonzales and Lavaca counties.
[Read more…]

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