Eagle Ford Well Record for Natural Gas - Escondido Resources II

Petrohawk Eagle Ford Shale Map
Petrohawk Eagle Ford Shale Map

An Eagle Ford well record was recently set by Escondido Resources in the Hawkville Field in Webb County. The company completed the Spohn Ranch 1H well with a 6,975 ft lateral and 25 fracture stages. The well came online at more than 16 mmcfd and produced 0.4 Bcf in the first 30 days online. Escondido now has plans for additional development in the area.

Escondido is also pushing forward developing other horizons in South Texas. The company just completed its first horizontal "Escondido" well. Let's hope for the company's namesake this turns out to be a good investment. The first well indicates it will and the company plans seven follow up wells

The Storey 4H well is located in LaSalle County, Texas. in the Tres Encanto Field, an area also referred to as the White Kitchen Field. In its first 30 days of production, the Storey 4H averaged nearly 400 barrels of crude oil production per day along with 1.2 Mmcf of associated gas per day. The well was completed with eight frac stages over a 4,475-foot lateral.

A McMullen County Olmos formation well was also completed.

In its first 30 days, production from the Nichols 3H averaged more than 300 barrels per day and 1.1 Mmcf of associated gas per day. The well is the third successful horizontal oil well the company has drilled in the prolific AWP Field. The well was completed with 13 frac stages over a 6,667-foot lateral. The company is currently drilling three additional wells in the AWP Field.

Escondido currently produces more than 74 mmcfed from the Eagle Ford, Escondido, and Olmos formations across Webb, LaSalle, and McMullen counties. The company owns approximately 60,000 net acres, with Eagle Ford rights on approximately half that amount.

Read the full press release escondidoresources.com

BHP - Petrohawk Deal Brings Australia to the Eagle Ford

Petrohawk's Eagle Ford position is paying off in a big way.  The company has received a bid to be acquired by BHP Billiton for a 65% premium over the prior days stock price. Petrohawk's leading position in the Eagle Ford is likely a primary driver behind the acquisition. The company is strategically positioned in two of the hottest areas of the Eagle Ford with its Black Hawk and Hawkville field positions. The company also has a sizeable oil position at the Red Hawk Field in the Eagle Ford Shale Oil window that has not provided the economic results needed to compete for capital with Petrohawks other assets. Expect the Red Hawk Field to get more attention now that the operator has much deeper pockets. Overall, drilling rates across Petrohawks asset base will likely increase as BHP looks to accelerate value from its newly acquired assets.

That's a hefty price but BHP needs the people and the assets. After several failed bids to consolidate in the mining industry, the company turned to investing in oil & gas exploration and production.

The Petrohawk acquisition follows BHP's $4.75 billion acquisition of Chesapeake's Fayetteville Shale assets. BHP only got the assets in the Chesapeake deal, so over the next year the company was tasked with building a large US E&P business. The Petrohawk acquisition gives them the human capital and just happens to be a company that was a leader in the Fayetteville Shale before divesting assets to focus in the Haynesville Shale and Eagle Ford Shale.

BHP gets Petrohawk with its three core positions which include 225,000 acres in the Haynesville Shale, 120,000 net acres in the Lower Bossier Shale, 332,000 acres in the Eagle Ford Shale, and 325,000 acres in the Midland/Delaware basins, which is prospective for the Avalon Shale, Bone Springs, and Wolfcampian formation.

Combined with the Chesapeake deal, BHP will become one of the top ten natural gas producers in the US. The company's onshore US operations will include almost 1,500,000 net acres that produce over 1.3 Bcf per day.

BHP Billiton [ASX: BHP, NYSE: BHP, LSE: BLT, JSE: BIL] and Petrohawk Energy Corporation (“Petrohawk”) [NYSE: HK] announced today that the companies have entered into a definitive agreement for BHP Billiton to acquire Petrohawk for US$38.75 per share by means of an all-cash tender offer for all of the issued and outstanding shares of Petrohawk, representing a total equity value of approximately US$12.1 billion and a total enterprise value of approximately US$15.1 billion, including the assumption of net debt. The Petrohawk board of directors has unanimously recommended to Petrohawk shareholders that they accept the offer.

The transaction would provide BHP Billiton with operated positions in the three world class resource plays of the Eagle Ford and Haynesville shales, and the Permian Basin. Petrohawk’s assets cover approximately 1,000,000 net acres in Texas and Louisiana, with estimated 2011 net production of approximately 950 million cubic feet equivalent per day (MMcfe/d), or 158 thousand barrels of oil equivalent per day (Mboe/d). At year-end 2010, Petrohawk reported proved reserves of 3.4 trillion cubic feet of natural gas equivalent (Tcfe). The company has a current non-proved resources base of 32 Tcfe for a total risked resource base of 35 Tcfe. Petrohawk reported gross assets of US$8.2 billion as at 31 March 2011 and US$390 million of profit before tax for the year ended 31 December 2010.


Eagle Ford Shale Region Experiencing a Record Drought

South Texas is experiencing one of the worst three droughts on record.  Producers are coming up with creative ways to conserve resources and tap water resources that have gone unused for many years.

"We have not experienced any problems obtaining water," in the play, Richard Wheatley, a spokesman for El Paso Corp., said.

The Houston-based producer and pipeline company, which has drilled about 30 wells in the so-called central region of the Eagle Ford play, uses groundwater either from water wells the company itself has drilled or that it has purchased under contract with ranchers in the region.

El Paso uses no surface water from lakes or rivers in the region, Wheatley said.

Petrohawk, one of the operators that pioneered the development of the Eagle Ford, has reduced its water needs by two-thirds since it began drilling in the play about three years ago, spokeswoman Joan Dunlap said.

"We use much less water for Eagle Ford wells than is required for wells in other plays. We are down to using less than 5,000 barrels per frack stage, as opposed to 15,000 barrels per stage," she said.

She added that the company's operations actually result in increasing the access to water supplies for surface landowners in the region.

"Our Hawkville field sits atop a prolific 500-foot thick aquifer located between 4,000 and 5,000 feet underground," Dunlap said.

"The landowners, largely ranchers and farmers, have no means to access this water for their use. Nearly every lease calls for the drilling of a water well, at the company's expense, that is used for well completion operations and then turned over to the surface owner for future domestic use," she said.

"Since these water wells cost about $500,000 each, we don't know a landowner that isn't tickled pink with

Read the full article at Platts.com