Eagle Ford’s Sanchez Energy Reports Record Revenue in Q2 2014

Company Increases Proved Reserves 170% (117 MMBOE) Following Eagle Ford Acquisition from Shell
Sanchez Energy Eagle Ford Acreage Map

Sanchez Energy Eagle Ford Acreage Map | Click to Enlarge

Eagle Ford-focused Sanchez Energy reported record revenue of $151.7 million in the second quarter of 2014, with portfolio-wide production increasing 164% year-over-year to 20,437 boe/d.

At the end of the quarter, the company closed its massive Eagle Ford acreage deal with Royal Dutch Shell for 106,000 net Eagle Ford acres in Catarina. The acquisition almost doubled the company’s acreage in the play. Total purchase price for the acquisition was approximately $639 million, less approximately $85.5 million in normal and customary closing adjustments.

Read more: Sanchez Nearly Doubles Eagle Ford Acreage in $639 Million Deal with Shell

Sanchez CEO Tony Sanchez, III, said,”as of August 1, 2014, Sanchez Energy has officially taken over all operations at Catarina after a brief transition period with Shell. The transition of operations has gone smoothly and the ramp up of Sanchez Energy operations is ahead of schedule. We have fully staffed our operations at Catarina and now have drilling, completion, and artificial lift installation in progress. Additionally, now that we have achieved critical scale from the Catarina assets, we are utilizing a dedicated frac spread as well as direct sourcing of chemicals and proppant. We expect these factors will reduce completions costs by an additional 30%, allowing flexibility to increase fracture stage size or improve returns from a lower development cost.”

With the Catarina acquisition, Sanchez increased its proved reserves 170% to approximately 117 MMBOE as of June 30, 2014. Crude oil constituted 49% and NGLs constituted 24% of the company’s proved reserves. 56% of the company’s proved reserves were classified as proved undeveloped, compared to 70% at same time last year.

Sanchez Eagle Ford Q2 Operations Update

Sanchez Energy currently has 6 gross rigs running across its Eagle Ford acreage, with 419 gross producing wells and 38 gross wells in various stages of completion.

By area, the company’s Cotulla, Marquis, and Palmetto Eagle Ford operating areas comprised approximately 42% of the crude oil cut from total second quarter 2014 production volumes. Company officials expect the percentage of oil expected in the company’s third quarter production volumes should decrease as the impact of the production volumes from Catarina are recorded.

The company’s third quarter production guidance range portfolio-wide of 37,000 to 41,000 boe/d has been revised to 36,000 to 40,000 BOE/D while its fourth quarter production guidance range of 45,000 to 49,000 boe/d has increased to 48,000 to 50,000 boe/d. Production guidance for 2015 remains the same at a range of 53,000 boe/d to 58,000 boe/d.

Read more at sanchezenergycorp.com

ConocoPhillips Raises Eagle Ford Reserve Estimates By 39% to 2.5 Billion BOE

250,000 boe/d in Eagle Ford Production Estimated by 2017
ConocoPhillips' Eagle Ford Geologic Map

ConocoPhillips’ Eagle Ford Geologic Map

ConocoPhillips increased its Eagle Ford reserve estimates in early April 2014 by 39% from 1.8 billion to 2.5 billion bbls of oil in place. Company officials say production is expected to exceed 250,000 boe/d in the Eagle Ford by 2017. That’s nearly 100,000 more BOE than the company’s target goal at the end of 2013.

Read more: Conoco Phillips’ Eagle Ford Production Up 58% to 141,000 boe/d in Q4 2013

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EOG’s Burrow Unit 5H Well Better Than First Reported

Eagle Ford Performance Driving Oil Production Growth
EOG Eagle Ford Oil Well Record Production

Recent EOG Eagle Ford oil well produces more than 7,500 barrels of oil in one day! | Click to Enlarge

We published details from the Texas RRC completion report related to EOG’s record Eagle Ford well, but the company’s second quarter operations update proved the well was better than first reported.

EOG reported the well came online at more than 9,200 boe/d. That compares favorably to the 8,600 boe/d that was reported to the commission. Better yet, the well was still producing more than 4,200 barrels of oil per day after 30 days. The well is easily the best in the Eagle Ford to date. [Read more…]

Chesapeake’s Eagle Ford Performance Drives Oil Production Guidance Increase

Will Surpass 1,000 Drilled Wells In The Eagle Ford In The Third Quarter
Chesapeake Energy Oil Gas Production Graph

Chesapeake Energy Oil & Gas Production Graph | Click to Enlarge

Chesapeake has increased it oil production guidance for the year by 1 million barrels to 38-40 million barrels as more wells have come online in the Eagle Ford.

The company  connected 140 wells to sales in the second quarter and averaged production of 190,000 gross (85,000 net) boe/d. Approximately 66% or almost 57,000 b/d of the production stream is crude oil. The number of wells brought to sales is up from 111 in the first quarter and production is up 14% from that period. [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…]

Talisman Cuts Production Target – Committed to the Eagle Ford

Talisman Energy’s Eagle Ford operations didn’t contribute to the lower production volumes, but a shortage of skilled labor is keeping the company from ramping up as quickly as Talisman would like.

The Eagle Ford benefits from oil, condensate and NGL production that dry gas plays don’t provide. The higher priced commodities allow operators to continue drilling even though the gas stream might not be prolific enough to make a commercial well. [Read more…]