Enlink Midstream Aquires Pipeline Company

March 26, 2015 Elizabeth Alford

Enlink Midstream Partners announced Monday it will acquire Victoria Express Pipeline (VEX) from Devon, giving the new company a “strategic footprint” into the Eagle Ford Shale play.

Devon Energy Reports Exceptional Q4

February 23, 2015 Elizabeth Alford

In its quarterly report, Devon Energy announced it finished an “outstanding year” as it rebounded from a $20 million net loss in 2013 to end 2014 with net earnings of $1.6 billion.

Devon's fourth-quarter total production rose 20% to 239,000 barrels per day, which represents a 48% increase from 2013.

The report credits the Eagle Ford’s prolific wells for these record numbers. Devon Energy is active in over 82,000 acres in DeWitt and Lavaca counties in Texas.

“Devon delivered another exceptional performance in the fourth quarter, rounding out an outstanding year for the company, including a significant repositioning of the portfolio.”

— John Richels, President and CEO.

ooking to 2015, Devon has significantly reduced its capital budget for next year by 20% to $4.96 billion. The company plans to slash its spending in all areas except the Eagle Ford, including a 21% cut in exploration and production. The company predicts oil production will increase 20% to 25% in 2015 and they plan to operate on 13 rigs for 2015, as compared with more than 20 rigs last year.

“With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015.”

— John Richels

In other Devon news, Chief Executive John Richels announced in December his plans to retire at the end of July. It is expected that their Chief Operating Officer, Dave Hager, will be named as his successor. Read more here.

Get the full report at devonenergy.com

Devon Subsidiary Constructing New Eagle Ford Oil Pipeline

June 6, 2014 Kirk Eggleston

Victoria Express Pipeline LLC (VEX), a subsidiary of Devon Energy, is constructing a 56.4 mile long pipeline from the Blackhawk central delivery point in DeWitt County, Texas to the inlet of Devon Gas Services's terminal at the Port of Victoria. The 12-inch pipeline is expected to come online July 1, 2014, with an ultimate capacity of 100,000 b/d.

In late 2013, Devon Energy agreed to pay GeoSouthern $6-billion for 82,000 net acres in the Eagle Ford Shale play. In the first quarter of 2014, the company said its net daily production in the Eagle Ford was 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Eagle Ford producers need to continuously think about how they will get their production to the refining market as activity in the play continues to grow. Wood Mackenzie recently released information stating production from the Eagle Ford Shale will reach 2-million b/d by 2020.

VEX is currently conducting a binding open season to attract companies for long term commitments in exchange for access to priority capacity. The open season will end on June 19, 2014.

VEX is also constructing an additional receipt point eight miles north of Victoria in Victoria County, Texas. The company may add an additional destination point at Point Comfort in Calhoun County, Texas.

Devon Banking on High Returns from Eagle Ford Investment

May 28, 2014 Kirk Eggleston

After closing its $6 billion transaction with GeoSouthern for 82,000 net Eagle Ford acres at the end of February 2o14, Devon says its current net daily production in the play is 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Devon is banking on high returns from its hefty Eagle Ford investment, and so far, the company appears to be confident it will achieve a lucrative pay off.

At the UBS Oil & Gas Conference at the end of May of 2014, the company's COO, David Hager, revealed the Lavaca County acreage is performing better than expected. Currently, the company has 300 total preliminary locations targeted in the county. In DeWitt County, the company has 900 preliminary locations targeted.

“When we acquired [the Eagle Ford acreage], we placed over 90% of the value from an internal standpoint on DeWitt County. We didn’t put as much value on Lavaca County initially []. What we’re finding is the results aren’t quite as good as DeWitt County, but there are a lot better than we originally anticipated.”

— David Hager

Recently, another Eagle Ford operator, Penn Virginia, revealed strong results from two of its Upper Eagle Ford test wells in Lavaca County. One of the wells had an initial production (IP) rate of 2,165 boe/d. Company officials for Penn Virginia said in a quarterly update that the two wells have the highest wellhead flowing pressures the company has seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 – 6,000 standard cubic feet per barrel.

In 2014, Devon will drill approximately 230 wells across its Eagle Ford acreage position. About 200 of those wells are slated to be drilled in DeWitt County under a 50/50 partnership with BHP Billiton. The other 30 wells are to be drilled in Lavaca County, where Devon has a 100% working interest in the majority of the acreage. Also in 2014, look for Devon to drill some Upper Eagle Ford wells.

Devon Energy Sells Canadian Assets to Pay Down Eagle Ford Debt

April 3, 2014 Kirk Eggleston

Devon Energy completed the sale of its Canadian conventional assets to Canadian Natural Resources for $2.7 billion after taxes.

The company will use the money to pay down debt acquired from a $6 billion purchase of GeoSouthern's Eagle Ford assets, which was completed on February 28th.

Devon considers its' Eagle Ford Shale acreage as core to its portfolio, and plans on divesting its non-core US assets by the end of the year. Devon's other US core areas are in the Barnett Shale, Anadarko Basin and Permian Basin. The Mississippian-Woodford and the Powder River and Wind River Basins in the Rockies are emerging assets in the company's portfolio.

Devon's 2014 Eagle Ford Outlook

In 2014, Devon plans on investing $1.1 billion in the Eagle Ford and will drill more than 200 wells. The company estimates average net production through October, 2014, of 70,000 – 80,000 boe/d in the play, with peak average production estimates in the play of ~140,000 boe/d over the next several years.

After the sale of it's Canadian assets are completed, Devon will retain it's Lloydminster and Horn River area heavy oil assets, located in Eastern Alberta.