WoodMac: Eagle Ford to Hit Two-Million b/d Mark by 2020

June 5, 2014 Kirk Eggleston

According to the oil and gas research and consulting firm Wood Mackenzie, the Eagle Ford will reach two-million b/d of crude and condensate production by 2020. Compared to the next most significant liquids-rich shale play in the U.S., the Bakken Shale, in North Dakota, the Eagle Ford is expected to produce 16% more crude and condensate production during the same year combined.

The Eagle Ford Shale is really on a roll. In June of 2014, analysts at the Bentek Energy Benposium Conference, in Houston, TX, said the Eagle Ford had the highest internal rate of return (IRR) among all other U.S. Shale plays. According to Bentek Energy Senior Analyst Catherine Bernardo, the Eagle Ford is sitting at just over 70% IRR.

Potential for Eagle Ford Production Constraints

Currently, there aren't any production constraints in the Eagle Ford. That's due to a number of factors, but namely an already existing midstream infrastructure in Texas, the completion of multiple midstream projects since the boom began and the Gulf Coast refining markets ramping up to accommodate Eagle Ford production.

At Benposium, analysts predicted the Eagle Ford market would not see a lot of production constraints near the end of the decade; however that could change if Eagle Ford production reaches a certain threshold.

“If the Eagle Ford reaches two-million b/d by 2019, there would be production constraints in the play.”

— Bentek Energy Sr. Analyst, Erika Coombs

Should Eagle Ford production reach two-million b/d of crude and condensate production by 2020, that means industry players essentially have a one-year pad to accommodate for the anticipated increase.

ConocoPhillips Eagle Ford Production Up 58% to 141,000 boe/d in Q4 2013

February 5, 2014 Kirk Eggleston

ConocoPhillips' Eagle Ford Shale production was 141,000 boe/d in the fourth-quarter of 2013, surpassing fourth quarter 2012 production from the formation by 58%. The Lower 48 and Latin America accounted for ~28% of the company's total production.

ConocoPhillips Close to Hitting Projected Growth Targets in the Eagle Ford

In the fourth quarter of 2012, Conoco's Eagle Ford production averaged 70,000 boe/d, but grew rapidly in Q4 2012 to 100,000 boe/d. In December of 2013, Conoco announced a five year plan to invest $8 billion in the Eagle Ford and grow production to almost 150,000 boe/d by 2017.

Conoco will likely reach its goal of 150,000 boe/d from the Eagle Ford sometime in 2014 or almost three years earlier than planned.

ConocoPhillips Capital Budget in Unconventional Drilling

In 2014, Conoco will spend ~$9 billion on its North American operations. Approximately $4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale. In 2013, Conoco's production in the Eagle Ford, Bakken and Permian grew 31% from ~167,000 boe/d in the fourth-quarter of 2012 to ~218,000 boe/d in 2013.

Eagle Ford Contribution to Conoco's Reserves

The growth in unconventional drilling has contributed greatly to Conoco's reserves.

“2013 was a significant year for the company and we achieved several important, strategic milestones... [the company] achieved conventional and unconventional exploration success... [and] our capital program yielded strong organic reserve replacement.”

— CEO Ryan Lance

In 2013, Conoco added 470 million boe in Lower 48, primarily in liquids-rich shale plays, including the Eagle Ford and Bakken.

ConocoPhillips Production in 2013 and Plans Moving Forward at a Glance

ConocoPhillips Eagle Ford Shale Q4 production up ~58% from 2012 to 141,000 boe/d
~ 28% of ConocoPhillips Lower 48 Production is in Bakken
$4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale in 2014
470 million boe in Lower 48 reserves added in 2013, primarily in liquids-rich shale plays, including the Eagle Ford and Bakken
31% production growth in Bakken, Eagle Ford and Permian to ~218,000 boe/d in Q4 2013

ConocoPhillips Is Increasing Eagle Ford Spending in 2014

December 20, 2013 R.T. Dukes

ConocoPhillips will spend $16.7 billion in 2014 (6% more than 2013) and 55% of the total ($9.18 billion) is allocated in North America.

Within North America, Conoco expects continued growth from the Eagle Ford, Bakken, and Permian plays.

Approximately $4.3 billion will be spent on development drilling in the Lower 48 states. The budget includes "increased investment in the drilling programs in the Eagle Ford, Bakken and Permian."

“2014 is an important year for ConocoPhillips,” said Ryan Lance, CEO. “Since becoming an independent E&P company, we have set out to deliver a unique value proposition of 3 to 5 percent volume and margin growth with a compelling dividend.”

Conoco has a five year plan to invest $8 billion in the Eagle Ford and grow production to almost 150,000 boe/d by 2017. The company has 227,000 net acres prospective for the play and an estimated resource potential of 1.8 billion boe.

Read the full press release at conocophilips.com

Halcon Allocating More Capital To Its Brazos County Eagle Ford Development

June 10, 2013 R.T. Dukes

Halcon announced plans to spend $100 million targeting the Eagle Ford in Brazos County in 2013 just two months ago. Now, the company might spend double or triple that number.

The company didn't say how much more capital would be allocated to the play, but said "capital is being reallocated to El Halcon from the Woodbine..."

When plans were to spend $100 million in the play, Halcon stated it would operate 1-3 rigs throughout the year. It's just June and the company already has 5 rigs working the play. The company had planned to spend ~$390 million in the Woodbine, so if we assume half of the capital is reallocated to the Eagle Ford, it is very likely Halcon will spend between $200-300 million this year alone.

Eagle Ford Laterals Getting Longer

The two most recent wells drilled in the area have average laterals of 8,349 ft and came online at more than 1,100 boe/d (94% oil) each. Those rates were achieved with a 16/64 choke and represent improvement of 18% over recent wells.

The Bison 1H well in Brazos County was drilled from spud to total depth in less than 11 days, including a 9,000+ ft lateral.

Halcon is also utilizing pad drilling where possible and set casing on three wells in just nine days.

Halcon has 9 wells producing in the area, 5 wells awaiting completion and 5 wells being drilled.

Highlights from the operations update weren't limited to the Eagle Ford, Halcon also announced a Bakken well that produced more than 3,000 boe/d. Read the full operations update at halconresources.com

Halcon's New Eagle Ford Core Play And More - Floyd Wilson

April 25, 2013 R.T. Dukes

Floyd Wilson recently sat down with Jim Cramer to discuss Halcon's development strategy across its shale plays. The company keeps to a strategy of developing infrastructure before developing assets.

“ $200 oil is no longer a risk.”

Halcon plans significant divestitures of as much as $400 million or more. Halcon is ramping up in the Eagle Ford and Utica.

"Hard to say if the Eagle Ford is going to be the company's Saudi Arabia, but it is going to be big", Halcon CEO, Floyd Wilson.

He also expects the price of oil to stay volatile with our new supplies. He believes the opportunity is that oil prices might be moderate for some time.