BHP touted the strength of the Eagle Ford in its year-end results, but also announced plans to lower capital spending in the play to a little more than $2.9 billion over the next twelve months.
BHP's fiscal year 2013 ended on June 30th, so the company is reporting year-end results.
BHP is lowering its onshore U.S. oil & gas spending from $4.8 billion in fiscal year 2013 to $3.9 billion in fiscal year 2014. Approximately 80% of spending was allocated to the Eagle Ford and Permian in 2013 and approximately 75% of spending will be allocated to the Eagle Ford in 2014. The remaining 25% of drilling activity will be allocated in the Permian Basin and Haynesville Shale.
Approximately 75 per cent of operated drilling activity will be focused on our liquids rich acreage in the Eagle Ford.
At times over the past couple of years, BHP has had as many as 30 rigs running in the Eagle Ford, but plans call for 19 rigs in fiscal year 2014. This doesn't necessarily mean fewer wells will be drilled. While the company isn't as vocal about its operations, there is no doubt wells are going down much faster today than in years past. The company noted as much back in mid-July:
“An improvement in drilling productivity is expected to facilitate a reduction in our rig count in the 2014 financial year, while a lower level of capital expenditure for Onshore US will be increasingly focused on our liquids rich acreage in the Eagle Ford.”
BHP produced a little more than 32 million boe or close to 90,000 boe/d from the Eagle Ford in fiscal year 2013.
BHP has completely suspended drilling the Fayetteville Shale.