Matador Reduces Eagle Ford Rigs in 2015

Company Set to Announce Details in February
Matador Pulling Two Rigs in the Eagle Ford in 2015

Matador Pulling Two Eagle Ford Rigs in 2015

Matador Resources Company, a Dallas-based energy company heavily invested in the Texas shale oil industry, announced yesterday that it plans to reduce its operation by cutting production from two rigs in Eagle Ford in 2015.

This is a big move for the company considering that their oil, natural gas and total oil production were at record levels at the end of 2014. Management says that their strategy to narrow drilling efforts to three rigs in its Permian Basin operations is necessary in light of lower oil prices, which have dropped from $100 per barrel in June to below $50. But the company insists that it isn’t abandoning the region entirely.

The report states, “As a result of the Company’s strong execution in the Eagle Ford over the past three years, this asset has become an “oil bank” that Matador can return to and develop further at a future time when commodity prices are more favorable.”

Related: What Lower Oil Prices Mean for Texas and Eagle Ford

Matador was originally scheduled to release its full operational report by mid January, but have moved it to February 15th in order to have more time to better assess their current situation.Everyone is invited to listen in to this presentation and the details can be accessed through the Company’s website on the Presentations & Webcasts page under the Investors tab.

Find out more at matadorresources.com

Texas Oil Production Reaches Levels Not Seen Since the 70s

Texas Oil Production Exceeds that of Iraq
U.S. Oil Production

U.S. Oil Production | Click to Enlarge

The “good ol’ days” for the oil and gas industry are back in Texas! The Energy Information Administration (EIA) recently released data showing the state produced just over 3 million b/d of crude oil in April of 2014, reaching production levels not seen in the state since the 70s.

Many Texans remember well the oil bust of the early 80s, when the price of oil fell drastically, and what followed was a blight on the states’ economy. A steady decline in oil production, which began in 1972, and fell sharply after the bust, signaled the state’s oil boom days were likely over for good. But now Texas along with the rest of the U.S. is on track to become the top oil producer in the world by 2015, according to the International Energy Agency (IEA). The EIA said in the month of April, Texas and North Dakota, which encompasses the prolific Bakken Shale play, made up nearly half of U.S. oil production (48%).

The rise in Texas’ oil production is thanks in large part to the tight oil and shale gas revolution in the Eagle Ford, and made possible by advancements in horizontal drilling and fracking technology. The Permian Basin in West Texas, a major oil producing area in the state for years, has also seen an increase in horizontal drilling since the end of 2013, and many of the areas untapped oil reserves are being accessed by the technology.

Read more: Why Horizontal Drilling is Important to Texas Oil Production

Texas Surpasses Iraq’s Oil Production

The EIA’s data is yet another indication of America’s re-emerging prominence as a leader in world-wide oil production. In June of 2014, Iraq’s production fell 400,000 b/d to 2.9 million, due to violence and civil unrest flaring up in the country, according to Bloomberg. That means Texas has likely surpassed Iraq’s oil production, since Texas’ production has increased on a month-to-month basis since 2011. Iraq was rated as the second largest OPEC producer in April at 3.2 million b/d.

Read more at bloomberg.com

Why Horizontal Drilling is Important to Texas Oil Production

Horizontal Drilling Ramps Up in West Texas' Permian Basin and Dominates Eagle Ford Activity
HorizontalDrillingUS

Horizontal Drilling in the U.S. | Click to Enlarge

The tight oil and shale gas revolution has been made possible largely by horizontal drilling and fracking technology. Although the controversial process of fracking tends to dominate the headlines, advancements made in horizontal drilling have allowed operators to precisely access more of the shale rock layer than was thought possible even a decade ago.

As of this writing, 237 rigs in the Eagle Ford are drilling horizontal wells, which accounts for 88% of all rig activity in the play. Without a doubt, horizontal drilling dominates the Eagle Ford play, not to mention the next most significant shale play, the Bakken Shale, where horizontal drilling also reigns supreme. On our sister site, BakkenShale.com, horizontal drilling in our coverage area accounts for nearly 90% of all active rigs.

Horizontal Drilling Ramps Up in the Permian Basin

Although the Eagle Ford is by far the top producer in the state of Texas, it is not the top dog for horizontal drilling. Rather, its the Permian Basin that currently wears that crown. For years, much of the oil produced in the state came from West Texas, and although the spotlight has recently shifted to the Eagle Ford, the Permian appears to be ramping up for a revolution of its own.

According to the U.S. Energy Information Administration, since the end of 2013, the number of horizontal rigs in the Permian Basin have increased dramatically. From December 27, 2013, to the week ending on May 9, 2014, the number of horizontal, oil-directed rigs in the Permian Basin rose by 63 rigs, which accounts for 50% of the total increase in the United States.

“A change in the horizontal, oil-directed rig count of the scale seen in the Permian indicates a significant rise in activity in its tight oil plays relative to recent developments in other major production areas,” said officials with the EIA .

At the beginning of 2013, both the Eagle Ford Shale and the Bakken Shale, exceeded the Permian Basin in the number of oil-directed horizontal drilling rigs. By the end of 2013, the Permian Basin’s 215 rigs surpassed both the Eagle Ford and Bakken, which at that time had 173 and 164 rigs, respectively. During the first quarter of 2014, the increase in oil-directed horizontal rigs in the Permian Basin was more than four times the combined increase in the Eagle Ford and Williston Basin.

Read more at eia.gov

Clayton Williams Falls Short of First-Quarter 2014 Production Estimate

March 2014 Divestiture of Non-Core Eagle Ford and Austin Chalk Assets Contributes to Lower than Forecasted Production
Clayton Williams Eagle Ford Acreage Map

Clayton Williams Eagle Ford Acreage Map | Click to Enlarge

Clayton Williams production, revenues and operating costs for the first-quarter of 2014 were down compared to the first-quarter of 2013, after two significant divestitures over the course of the last year. Overall production was 250 boe/d below analyst estimates for the first-quarter of 2014 according to company officials.

In March 2014, Clayton Williams sold all of its interests in certain non-core Austin Chalk and Eagle Ford assets. Due to the divestiture, production for the sold assets in the first-quarter of 2014 went down 47% compared to the first-quarter of 2013. Daily production for the sold assets  in the first-quarter of 2014 was 385 boe/d.

[Read more…]

Is the Eagle Ford on Its Way to 2 Million Barrels Per Day of Oil Production?

The Play Could Make Texas One of the Most Influential Oil Suppliers in the World
Eagle Ford Production

Eagle Ford Production | Click to Enlarge

Eagle Ford Production has outpaced expectations for five years and it should be no surprise if the area eventually produces more than 2 million barrels of oil per day.

It’s hard to comprehend the full context of the previous statement, so let me state it another way. If the Eagle Ford eventually produces between two and three million barrels of oil per day, the play by itself could land in the list of the top 10 oil producing countries in the world. The entire world produces just under 90 million barrels of oil per day.

Most research organizations predict production will reach between 1.6 and 2 million b/d sometime between 2017 and 2020. Recent results in the Buda and Austin Chalk make it easy to see how the area could produce much more if other formations prove commercial. Add the Permian Basin, where Texas is experiencing similar growth, and the state is closing in on Mexico as the third largest producer in North America (behind the U.S. and Canada) [Read more…]

Eagle Ford Record Set for Well Spuds in Q3

Over 1,100 Wells Started for the First Time in a Three Month Period
Eagle Ford Well Spuds Q3 2013

Well Spuds Q3 2013 | Click to Enlarge

Baker Hughes released its third quarter estimates for well spuds and the Eagle Ford eclipsed 1,100 wells in a single quarter for the first time. The play accounted for 1,133 or more than 10% of the 9,175 wells spud in the U.S. during the quarter.

Baker Hughes tracks the 14 core counties when evaluating the play, so actual numbers are higher. The oilfield service company tallied 233 rigs the 14 county area during the quarter compared to ~270 in the 30 county area we observed. [Read more…]

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