Eagle Ford Shale Contends for #1 Spot Among Shale Oil Plays

The Eagle Ford's promising economics are not news to anyone in South Texas, IHS reported promising results from a study the research company has underway. Eagle Ford wells are producing better than the Bakken Shale of North Dakota and Montana.

A typical well in the Eagle Ford averages 300 to 600 barrels-per-day (bpd) in its peak month of production, compared with 150 to 300 bpd for a Bakken well, according to the study.

Current Eagle Ford production is just half that of the Bakken, but the ND shale play had a 10-year head start. A little over 200 rigs are drilling in the Bakken vs. ~250 in the Eagle Ford. It's also worth noting that horizontal laterals are consistently 10,000 ft in the Bakken. That's roughly double the most common lateral length in South Texas. That means the Eagle Ford is out producing the Bakken with as little as half the reservoir contact.

All is good news for South Texas. Companies deploy their capital to the areas of their portfolio that provides the best economic returns. In general, the rank of either oil or gas plays doesn't change dramatically over short periods of time. Commodity prices do, but the Eagle Ford is the top play in the U.S. at both $50 and $100 oil prices. In the absence of a severe recession, Eagle Ford development will boost the South Texas economy for decades to come.

You can read more at reuters.com

Caller's Oil & Gas Report For Oct. 4, 2011

Eleven well permits were reported in the Caller's Oil & Gas Report. The most significant of those are two 21,000 ft permits by Pioneer Natural Resources. Both wells were permitted in Live Oak County, with one in the Sugarkane field and one in the Eagleville field. Longer laterals are the trend in shale  plays. Drilling an extra foot or thousands of feet is much more efficient than drilling multiple wells. Of course, there is a point of diminishing returns due to technical limitations, but operators are routinely drilling 10,000 ft laterals in other shale plays.

Goodrich Petroleum Buda Lime Well Results Impress

In Goodrich Petroleum's operations update from the second quarter, the company announced impressive well results from a horizontal Buda Lime well. The well came on at almost 1,400 barrels of oil per day and 1.5 mmcfd. The well averaged 1,000 barrels of oil equivalent per day over the first 30 days. At $75 oil that $2.25 million in first month. Subtract royalties and operating costs and your looking at a pretty quick payout. Possibly, 3-4 months. That's a good well!  

The Company has completed its third Buda Lime well, the Carnes 6H (67% WI) well, an unstimulated 3,100 foot lateral, at a 24-hour initial production rate of 1,635 BOE per day, comprised of 1,380 barrels of oil and 1,535 Mcf per day. The well averaged 1,000 BOE per day over the first thirty days, and had an estimated completed well cost of less than $3.0 million.

The Company has two rigs running full time drilling Eagle Ford Shale and Buda Limewells. For the remainder of 2011, the Company currently anticipates drilling 5 gross (3.5 net) Eagle Ford Shale wells on the southern half and 8 gross (5.5 net) Buda Limewells on the northern half of the Company's approximate 40,000 net acre block.

Read the press release at GoodrichPetroleum.com

Laredo Energy - Record Eagle Ford Production in Webb County

Eagle Ford Shale gas wells are performing above expectations for Laredo Energy in Webb County, TX. The company provided an update on its operations today. Eagle Ford Shale production reached 40 mmcfd following the completion of two new wells and the company has three wells awaiting completion in late August. Those three wells that will likely increase production beyond current levels. 

Laredo release the production information after the Puig 3H, and the Bruni-Summers 1H wells were tied into the EEG system. "We now have 25 horizontal completions in Webb County, where we have a 120,000 acre position," said Glen Hart, Laredo Energy's president and CEO. "We are continuing to develop our Eagle Ford position while adding horizontal completions in the shallower Austin Chalk, Olmos, and Escondido formations.

Laredo Energy currently has 16 horizontal wells producing in the Eagle Ford Shale. three in the Austin Chalk formation, one in the Olmos and five in the Escondido formation.

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Read the full press release at laredoenergy.com

Anadarko Petroleum Eagle Ford Shale Operations & Drilling Update

Anadarko Petroleum (APC) released its second quarter earnings results and provided an operations update in the Eagle Ford Shale. The company met and exceeding earnings expectations, while closing the $1.6 billion joint venture with KNOC. The company sold approximately one-third of its Eagle Ford assets in the Maverick Basin earlier in the year. The company is producing over 45,000 barrels of oil equivalent, which included gas sales of 25 mmcfd, 3,000 barrels a day of NGLs, and 6,000 barrels a day of oil production as an average for the quarter. That's approximately 25% growth quarter over quarter. Not too bad!! The ramp up in drilling rigs is paying off.

The company ended the quarter with 10 rigs active, but has since added a rig to bring the number of rigs drilling the Eagle Ford Shale to 11. The company also continued its pace of lowering drilling times as Anadarko set a record by drilling a well in 8.3 days. That's the 22nd well in less than 10 days. Even if you add a few days of down time, that's over 25 wells per year per rig.

The longest Eagle Ford Shale horizontal lateral, by Anadarko, was also drilled in the quarter. The well extended approximately 8,340 ft. We've seen other companies begin to extend laterals, so it will be interesting to see how this plays out. With service costs rising, operators will do everything possible to increase the profitability of their wells. Companies are limited by lease and unit boundaries, but it's often cheaper to drill longer laterals that drain a larger area than it is to drill multiple wells.

The company didn't comment on the Pearsall Shale, where others are beginning to drill. Newfield and Chesapeake both have plans to drill test wells this year. The Pearsall is a dry gas formation, so results will have to be very positive to draw capital away from the Eagle Ford.

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Read the full press release at anadarko.com