Noble Energy Plans Expansion into Eagle Ford

Company Announces $2.1 Billion Merger with Rosetta
Rosetta-Noble Merger

Rosetta Resources and Noble Energy to Merge

Houston-based Noble Energy announced Monday it plans to get into the shale business by acquiring independent producer, Rosetta Resources. The $2.1 billion deal will allow Noble to move into over 100,000 Texas acres including 50,000 in the Eagle Ford.

After months of instability due to low and fluctuating crude prices, this deal is significant because it reveals a renewed confidence in the industry and the tenacity and resilience of U.S. producers. Many also believe it may be a tipping point for future mergers.

The Wall Street Journal speculates that “ It is possible the merger of these two shale drillers will ultimately aid a rebound in oil prices. For now, though, it demonstrates the exploration-and-production sector’s ability to keep going in adverse conditions.”

Rosetta is a leading producer in the The Eagle Ford and reported 2015 Q1 production at 58.4 MBoe/d, a 17% increase from the same period last year.  Also during the quarter, the company spent $67.8 million for drilling and completion activity: they drilled three wells were drilled, 14 completed and 11 were brought on production.

Dave Stover, Noble Energy’s Chairman, CEO, and President stated, “I am excited to announce this strategic transaction which adds two exceptional and material areas to our global portfolio.  The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S., which will expand our resource base and development inventory and further diversify our portfolio.”

Rosetta Resources Sets Two Year Plan

Company Reports Record Production for 2014

Rosetta Eagle Ford Map | Click to Enlarge

Rosetta Resources announced its fourth quarter operational update and released a two year strategic outlook that includes major spending cuts.

In a press release on Tuesday, Rosetta Resources reported a Q4 net income of $185.5 million, which was up from $29.5 million for the same period last year. For the year, the company reported income of $313.6 million, or $5.09 per diluted share, versus net income of $199.4 million in 2013. Production for the quarter increased 41 percent from 2013 and averaged 73 MBoe/d.

Eagle Ford

Rosetta credits annual production records to the ongoing development of their Eagle Ford assets. The company’s capital budget for 2014 included included $666 million for drilling and completion in the Eagle Ford shale, where 94 wells were drilled and 95 wells were completed. Daily production from the Eagle Ford increased 36 percent over last year averaging 65 MBoe/d in the fourth quarter.

Read more about Rosetta’s operations in the Eagle Ford

Two Year Forecast

As Rosetta Resources looks to the future, their spending plan includes holding core acreage positions and conserving as the industry waits for a commodity price recovery. Capital spending will be up to $350 million per year, with a major goal to be to operate within cash flow for 2015 and 2016. The company’s production goals for this time period will be for about 60 thousand barrels of oil equivalent per day.

Jim Craddock, Rosetta’s Chairman, CEO and President commented that “Rosetta has taken important steps the past several months to position the Company on solid footing so that our shareholders will benefit the most from a commodity price recovery.” Craddock added “We’ve chosen to defer production growth and focused instead on living within our means, maintaining our core acreage positions, and defending a target production level of about 60,000 Boe per day.” 

Related: Rosetta Resources Hits Record Production and Proved Reserves

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Rosetta Resources Hits Record Production and Proved Reserves in 2013

Rosetta's development budget in the Eagle Ford accounted for ~67% of total spending in 2013

Rosetta Eagle Ford Map | Click to Enlarge

Rosetta Resources had a record setting year in 2013, increasing total annual production from ~37,000 boe/d in 2012 to 50,000 boe/d. That’s an increase of 34%.

The company also increased its total reservesby 39%  to 279 million boe.

Approximately 30% or 84 mmboe of the total added reserves came from Rosetta’s successful development of the Eagle Ford.

[Read more…]

Rosetta Resources Plans to Spend $735 Million in the Eagle Ford in 2014

Production Growth of 20-30% Expected in 2014
Rosetta Resources Eagle Ford Acreage Map By Area

Rosetta Resources Eagle Ford Acreage Map By Area | Click to Enlarge

Rosetta Resources will spend approximately tw0-thirds of its $1.1 billion budget in 2014 in the Eagle Ford.

The company will spend $735 million running 4-5 rigs, with plans to drill and complete 90-95 gross wells. Approximately half of the activity will target the Eagle Ford from the company’s Gates Ranch leases.

Read more: Rosetta Acquires Additional Eagle Ford Interests at Gates Ranch

As a result of Eagle Ford and Permian Basin growth, Rosetta expects production to grow 20-30% to 60,000-65,000 boe/d. [Read more…]

Rosetta Resources Has Yet To Complete 23% of Its Drilled Eagle Ford Wells

Company Has Completed 180 Eagle Ford Wells And Still Has 53 In Waiting
Rosetta Eagle Ford Asset Map - June 2013

Rosetta Eagle Ford Asset Map – June 2013 | Click to Enlarge

Rosetta Resources has completed 180 Eagle Ford wells and has 53 wells drilled and awaiting completion.

To put it another way – approximately 23% of the wells the company has drilled to date are sitting idle waiting to be completed.

Based on rough estimates, that means completion crews are a little more than six months behind drilling operations. [Read more…]

Rosetta Resources Acquires Additional Eagle Ford Interest At Gates Ranch

Spent $126 Million For 10% Interest In Gates Ranch.
Rosetta Resources Tom Hanks Eagle Ford Lease Map

Rosetta Resources Tom Hanks Eagle Ford Lease Map – La Salle County | Click to Enlarge

Rosetta Resources completed 18 Eagle Ford wells in the second quarter and extended its streak of growing production from the play to 14 quarters (3.5 years). The growth didn’t come without obstacles. Rosetta’s Eagle Ford production was impacted by facilities constraints at Gates Ranch that are expected to last through August and wells that were shut-in for adjacent completions.

Rosetta added to its inventory of development with successful wells in both Live Oak and La Salle Counties. The first well in the 505 acre Lopez Unit in Live Oak County had a seven-day IP of almost 2,000 boe/d (46% oil). The first Eagle Ford well on the 3,500-acre Tom Hanks lease in La Salle County yielded more than 650 boe/d over the first seven days (91% oil). The two areas add 7 and 44 net locations to the company’s drilling inventory, respectively. Rosetta also tested a Pearsall Shale well on the Tom Hanks lease that produced 5 mmcfd. [Read more…]