Chesapeake Eagle Ford Spending $1.82 Billion in 2014

Chesapeake 2014 Capital Budget
Chesapeake 2014 Capital Budget

Chesapeake has set its 2014 capital budget at $5.2 billion - $5.6 billion. That's down ~20% from the midpoint of the company's 2013 capital budget.

Approximately 35% of the budget will go to the Eagle Ford in 2014.

Low end estimates put that figure at about $1.82 billion. The company plans to run  15 - 18 operated rigs in the Eagle Ford throughout the year.

Read more:Chesapeake & EXCO Reach Eagle Ford Deal - $680 Million

Chesapeake Plans on Divesting Acreage in 2014 and Increasing Production

In 2014, Chesapeake plans to reduce its capital expenditures, and continue divesting noncore assets. In July 2013, the company sold 55,000 net Eagle Ford acres to EXCO Resources for $680 million.

While our guidance today does not reflect the impact of potential divestitures, we continue to pursue opportunities to high-grade our portfolio through asset sales. We believe these transactions will be value accretive and enable us to further reduce financial complexity and improve overall leverage. Over the last eight months, we have conducted an extensive review of Chesapeake’s portfolio. Due to the size and quality of the asset base, I am confident that by remaining focused on our strategic priorities we can deliver long-term production growth per debt-adjusted share of 5 – 9% annually, while maintaining a disciplined capital spending profile.
— Doug Lawler, Chesapeake's CEO

Average daily production estimates for 2014 are 680,000 - 695,000 boe/d company-wide, with an estimated 1,300 gross operated wells to coming online in 2014, or approximately 115 fewer wells than in 2013.

Chesapeake December 2013 Production and 2013 Well Inventory

For the month of December, net production of an Eagle Ford well was 90,000 boe/d.

At the end of 2013, 109 gross operated wells had been drilled in the Eagle Ford, but were awaiting completion. That figure represents the third highest total of un-completed wells at the end of 2013 in Chesepeake's play interests, with the Utica Shale and Marcellus Shale ranking at 195 and 112 respectively.

Chesapeake at a Glance

  • 2014 Capital Budget in Eagle Ford is $1.82 billion
  • Chesapeake plans on divesting more noncore assets in 2014
  • Net production of an Eagle Ford well in December 2013 was 90,000 boe/d
  • 109 gross operated wells awaiting completion in Eagle Ford at the end of the year
  • 680,000 - 695,000 boe/d company-wide, with approximately 1,300 gross operated wells to sales in 2014