Matador Resources Oil Production Up 76% Company-Wide Due to Eagle Ford

March 14, 2014 Kirk Eggleston

Matador Resources had a 76% increase in oil production across its portfolio in 2013 from 3,317 b/d - 5,843 b/d. The increase was a direct result of the company's drilling operations in the Eagle Ford Shale. In 2013, Eagle Ford production also contributed ~14.9 mmcf/d, which was ~42% of the company's total natural gas production.

Matador continues to have solid results in the Eagle Ford. Look for the company to make some acreage deals in the play this year.

Matador's Eagle Ford budget for 2014 is $318 million.

Matador Eagle Ford Operations in 2013

During 2013, Matador completed and began producing oil and natural gas from 32 gross (27.6 net) Eagle Ford wells, including 25 gross (25.0 net) operated and 7 gross (2.6 net) non-operated wells. In the fourth-quarter, the Company completed and began producing oil and natural gas from 9 gross (9.0 net) operated and 3 gross (1.1 net) non-operated wells.

Drilling and completion costs went down in 2013, and are connected to refinements in the company's fracking treatments.

“Drilling times and overall well costs have continued to improve in the Eagle Ford, and several recent wells on our western acreage in La Salle County in South Texas have been drilled in as few as eight days from spud to total depth with total drilling and completion costs at or below $6 million. The latest generation of our fracture treatment design, whereby we are pumping more fluid and more proppant while using more perforation clusters and tighter fracture spacing, is also resulting in better well performance, as compared to offsetting wells treated with earlier generation fracture treatment designs. Overall, our operations group is continuing to deliver better wells for less money in the Eagle Ford.”

— Matador CEO, Jospeh Foran

Matador is also seeing positive results from downspacing. To date, the company has now drilled seven 40 to 50-acre spaced wells on its central acreage in Karnes County. Two of these wells flowed at approximately 1,100 to 1,200 boe/d (almost 90% oil), making them two of the best wells drilled by Matador in this area.

Pioneer Hits Record Q4 Eagle Ford Production - 40,000 boe/d

February 13, 2014 Kirk Eggleston

Pioneer set a record for its fourth-quarter 2013 production in the Eagle Ford Shale, averaging 40,000 boe/d. That's up ~14% from 35,000 boe/d in the fourth-quarter of 2012.

Forty-one wells were placed on production during the quarter in the Eagle Ford. Full-year 2013 production averaged 38,000 boe/d. That's an increase of ~35% compared to average production of 28,000 boe/d in 2012.

In the fourth-quarter, the Eagle Ford contributed to Pioneer's net recoverable resource potential, which increased from more than 8 billion boe to more than 10 billion boe.

Pioneer's Eagle Ford Outlook in 2014

Pioneer plans to spend $545 million in the Eagle Ford in 2014. The breakdown includes $480 million for it's horizontal drilling program and $65 million for infrastructure and land acquisitions.

The company plans on drilling 110 wells in the Eagle Ford Shale. Most of these wells will be drilled utilizing three-well and four-well pads. Full-year 2014 production is forecasted to range from 45,000 boe/d to 49,000 boe/d, an estimated increase of 18% - 29% compared to full-year 2013.

Of the 110 Eagle Ford wells planned, 45 will be targeting the Upper Eagle Ford as part of the downspacing program in the play. Pioneer's first test well in the Upper Eagle Ford continues to perform in-line with offset Lower Eagle Ford wells.

“Our main objective is to translate the resource growth we delivered in 2013 to strong production growth. To accomplish this, we are increasing our horizontal rig count in the northern Spraberry/Wolfcamp from five rigs at the end of 2013 to 16 rigs by the end of the first quarter. We will also continue an active drilling program in the southern Wolfcamp joint venture area and the Eagle Ford Shale. As a result, we expect a 14% to 19% increase in production in 2014 compared to 2013.”

— Scott Sheffield, CEO

For the first quarter, Pioneer expects to place approximately 26 horizontal wells on production in the Eagle Ford, predominately in the second half of the quarter. Production from these wells is anticipated in the second quarter.

Pioneer's Eagle Ford Highlights

Q4 2013 record production - Up 14% quarter to quarter to 40,000 b0e/d
2013 average production of 38,000 boe/d
$545 million capital budget slated for Eagle Ford in 2014
2014 production forecasted between 45,000 boe/d - 49,000 boe/d
110 wells to be drilled with 45 wells slated for the Upper Eagle Ford
Eagle Ford contributed to Pioneer's net recoverable resource potential - 8 billion boe to 10 billion boe

Forest Oil - Schlumberger Eagle Ford Development Agreement Inked

April 15, 2013 R.T. Dukes

Forest - Schlumberger Eagle Ford Acreage

Forest Oil and Schlumberger have signed an Eagle Ford development agreement in Gonzales County, TX. Schlumberger will pay $90 million in the form of future drilling and completion services, as well as related development capital in order to earn a 50% interest in Forest's Eagle Ford acreage position.

Once the $90 million has been contributed, Forest and Schlumberger will participate in future drilling on a 50/50 basis. Forest expects the drilling carry will contribute to development through 2014.

“We believe that our Eagle Ford position is a valuable oil asset and being aligned and working together cooperatively with a strategic partner such as Schlumberger will greatly enhance the value of this important asset.”

— Patrick R. McDonald, Forest’s CEO

Accelerating Eagle Ford Development

Forest Oil Schlumberger Eagle Ford Development Plan

With the drilling carry, Forest plans to accelerate development by moving to four rigs running in the play by the end of the third quarter. Forest has kept 1-2 rigs running through the past several months. Forest estimates the increased pace of drilling will improve the company's asset value by ~$250 million.

Forest's share of capital expenditures are estimated at $125 million in 2013 and $220 million in 2014. Production projections are flat in 2013 at 2,800 boe/d, but increase from an estimated 3,700 boe/d to 6,500 boe/d in 2014.

Forest now estimates it will hold an aggregate of 55,000 gross (27,500 net) acres in Gonzales County. That's a larger footprint, but a smaller net holding than the 40,000 gross (40,000 net) acres that would have been held under the company's previous development plan.

Based on 80-acre spacing, Forest has a total of 688 gross (344 net) drilling locations identified. Consider an estimated ultimate recovery of 300,000 boe and unrisked resource potential comes in at 100 million boe net to each company.

The agreement affects all wells spud on or after November 28, 2012.

“We are pleased to be part of this exciting opportunity, in which Forest and Schlumberger are fully aligned and committed to the development of Forest’s Eagle Ford unconventional resources.”

— Carl Trowell, President, Schlumberger Production Management

The deal reads well for Schlumberger because the company gets to utilize its expertise, while reinvesting its margin into high quality Eagle Ford assets. The deal values Forest's Gonzales County acreage at a little less than $3,300 per acre.

Read the full announcement at forestoil.com

Chesapeake's Eagle Ford Well Costs Down, Now Testing Downspacing

April 2, 2013 R.T. Dukes

Chesapeake Energy held a conference call yesterday to address the company's leadership transition. The call also provided an interim operations update.

The Eagle Ford is Chesapeake's staple liquids asset and the beneficiary of 35% of the company's $6 billion capital budget in 2013. The play also accounts for approximately 35% of the company's oil production.

Highlights from the call include:

Recently hit a daily production record of 124,000 gross (56,000 net to CHK) barrels of oil per day in the Eagle Ford
Second largest oil producer in the Eagle Ford
Eagle Ford oil is fetching a premium to WTI, with prices tracking LLS
Total daily production average of 80,000 boe/d net, with a target of 92,000 boe/d net by year-end
80,000 boe/d net is after subtracting the 5,000 boe/d net that will be sold with the company's northern acreage block
Spud to spud well cycle time down from 26 to 18 days year over year
Costs down from $9 million to $7 million for average 6,300 ft lateral wells
Target is for $6 million well costs when all acreage is held by production
Testing 350 ft or roughly 50-acre spacing from 500 ft or 70-acre spacing
Have 584 gross operated producing wells in the Eagle Ford

Chesapeake's Northern Eagle Ford acreage package is still on the market and I suspect we'll hear news of a deal sometime in the second quarter. The sale is part of the company's plan to divest $4-7 billion in assets in 2013.

Steve Dixon, acting CEO, stated "We will remain focused on increasing our liquids production, driving capital efficiencies across our business and enhancing our financial flexibility to prudently fund our future growth."

SM Energy Increases Eagle Ford Reserves Estimate - Downspacing

February 26, 2013 R.T. Dukes

SM Energy Operated Eagle Ford Acreage Map

SM Energy has increased its estimate of net recoverable resources in the Eagle Ford by 500 bcfe to 5.8 Tcfe. SM still only has 2 years of drilling booked as proved reserves. The company attributes the increase in reserves to better EURs (4.5 Bcfe per well) and expectations for tighter well spacing in portions of the play. Briscoe Ranch will be developed on 52-acre spacing compared to guidance of 72-acres per well previously.

The company completed 77 operated wells in 2012. At year-end, SM had 154 wells producing and 29 wells waiting to be brought online. Operated production grew to 271.3 mmcfed in the fourth quarter and non-operated production grew to 15,500 boe/d (93 mmcfed). That's growth of more than 10% over the third quarter of 2012.

SM is currently running 5 rigs and 2 frac spreads in the play. In it's non-operated position, SM expects Anadarko will drop down to 8 rigs in 2013, but believes the number of well completions will hold steady due to efficiency gains in drilling.

SM Energy operates 145,000 net acres in the Eagle Ford. Leases on 4,000 acres prospective for dry gas at Apache Ranch were allowed to expire in 2012.

Read the full press release at sme.com