ConocoPhillips (COP) is in the process of spinning off its crude oil refining business into a new company named Phillips 66. The company reported lower revenues than expected in the first quarter of 2012. I'm sure the details of the split are distracting corporate executives, but there isn't any sign of letting up in the Eagle Ford. Conoco ran an average of more than 16 rigs targeting the Eagle Ford during the first quarter of 2012. That's up two rigs from 14 during the fourth quarter of 2011.

The company is on pace to grow production to more than 60,000 boe/d in 2012 and to almost 120,000 boe/d in 2013. For those counting, that's 100% growth this year and 100% growth next year. In the Eagle Ford, the company reports industry leading performance with wells that breakeven at $37/bbl WTI. ConocoPhillip's 200,000 plus acres span the border of the black oil and condensate window in the play (Lavaca, DeWitt, Karnes, Live Oak, and McMullen counties), where the company reports the Eagle Ford will produce 77% liquids. That's good news in today's natural gas price environment.

ConocoPhillip's average well comes online at more than 700 bbls per day and will produce over 175,000 boe in the first year of its life. That puts first year revenue, for the average well, in the neighborhood of $10 million. Consider a 20% royalty burden and the company is operating wells that have around a 1-year payout.