Anadarko Petroleum (APC) released its second quarter earnings results and provided an operations update in the Eagle Ford Shale. The company met and exceeding earnings expectations, while closing the $1.6 billion joint venture with KNOC. The company sold approximately one-third of its Eagle Ford assets in the Maverick Basin earlier in the year. The company is producing over 45,000 barrels of oil equivalent, which included gas sales of 25 mmcfd, 3,000 barrels a day of NGLs, and 6,000 barrels a day of oil production as an average for the quarter. That's approximately 25% growth quarter over quarter. Not too bad!! The ramp up in drilling rigs is paying off.
The company ended the quarter with 10 rigs active, but has since added a rig to bring the number of rigs drilling the Eagle Ford Shale to 11. The company also continued its pace of lowering drilling times as Anadarko set a record by drilling a well in 8.3 days. That's the 22nd well in less than 10 days. Even if you add a few days of down time, that's over 25 wells per year per rig.
The longest Eagle Ford Shale horizontal lateral, by Anadarko, was also drilled in the quarter. The well extended approximately 8,340 ft. We've seen other companies begin to extend laterals, so it will be interesting to see how this plays out. With service costs rising, operators will do everything possible to increase the profitability of their wells. Companies are limited by lease and unit boundaries, but it's often cheaper to drill longer laterals that drain a larger area than it is to drill multiple wells.
The company didn't comment on the Pearsall Shale, where others are beginning to drill. Newfield and Chesapeake both have plans to drill test wells this year. The Pearsall is a dry gas formation, so results will have to be very positive to draw capital away from the Eagle Ford.
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Read the full press release at anadarko.com