Penn Virginia Seeks to Expand Eagle Ford Position

Penn Virginia Eagle Ford Operations Update - Dec 2013
Penn Virginia Eagle Ford Operations Update - Dec 2013

During the first quarter of 2014, Penn Virginia added 6,400 net acres at a cost of $3,000 per acre, and in January, the company sold its Eagle Ford Shale natural gas gathering assets for $100 million in-part for reinvestment in the play.

Penn Virginia currently has 125,300 gross acres (85,900 net) in the Eagle Ford, and anticipates on growing its acreage to a minimum of 100,000 net acres.

Due to continued success in adding to our Eagle Ford Shale acreage position, we are increasing our leasing capital expenditures guidance for the year.
— CEO, H. Baird Whitehead

It can be assumed with great confidence that Penn Virginia will strike a deal for more Eagle Ford acreage in the very near future.

Read MorePenn Virginia Sells Eagle Ford Midstream Assets to ArcLight Capital

Penn Virginia Eagle Ford First Quarter Operations Update

Penn Virginia's Eagle Ford production was up 15% quarter over quarter, from 13,145 boe/d to 15,152 boe/d at the end of the first quarter of 2014. Eagle Ford production represented ~72% of Penn Virginia's record breaking total production for the quarter of 21,133 boe/d.

During the quarter, the company saw positive 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 say that the two wells have the highest wellhead flowing pressures they have seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 - 6,000 standard cubic feet per barrel.

Initial testing of our adjacent Upper / Lower Eagle Ford Shale wells commenced in the first quarter and the initial results are strong. We saw initial production in excess of 2,000 BOEPD with a very high flowing pressure. Longer term testing will be necessary in order to fully understand the upside associated with the Upper Eagle Ford Shale, but we are very optimistic about the play.
— Whitehead

Penn Virginia estimates in both the upper and the Lower and the Upper Eagle Ford that approximately 1,510 gross drilling locations remain. Of that figure, 68% of those locations are prospective for the Lower Eagle Ford.

During the quarter, the company completed 16 (12.9 net) operated wells and participated in the completion of two (0.9 net) outside operated wells. At the end of the quarter, the company had a total of 19 (11.1 net) wells completing or waiting on completion and six (3.4 net) wells being drilled.


Comstock's Best Eagle Ford Wells Came Online in McMullen County in 2013

Comstock Eagle Ford Wells
Comstock Eagle Ford Wells

In 2013, Comstock completed 63 gross (42 net) Eagle Ford Shale wells, including six wells (3.8 net) drilled in 2012. Completed Eagle Ford Shale wells had an average initial production (IP) rate of 780 boe/d.

Read moreMcMullen County, TX and the Eagle Ford Shale

Best Producing Comstock Wells - McMullen County, TX

Comstock's best wells in the Eagle Ford were drilled in McMullen County, TX. Average boe/d results for the six best wells are listed below:

  • Gloria Wheeler C #3H - 1,340 boe/d
  • Gloria Wheeler C #1H - 1,219 boe/d
  • Gloria Wheeler D #4H - 1,113 boe/d
  • Gloria Wheeler A #4H 1,066 boe/d
  • Gloria Wheeler D #3H 1,054 boe/d
  • Gloria Wheeler C #2H 1,025 boe/d

All six wells produced more than 1,000 boe/d.

Comstock Company-Wide Drilling and Expenditures

During 2013, Comstock spent $343.6 million on its continuing development and exploration activities and $137.0 million on acreage acquisition costs. Comstock drilled a total of 75 horizontal oil wells (51.6 net) and two horizontal natural gas wells (2.0 net) across the company's assets.

Of the $137 million spent on acquisitions, the company spent $66.5 million on 70% of Ursa Resources’ interest in Eagle Ford assets in Burleson and Washington counties. The deal included one well producing 433 boe/d and 32,000 gross (20,000 net) acres.

Read more: Comstock-Ursa Resources Reach Eagle Ford Deal Worth $66.5 Million

Comstock had ~6,300 b/d of crude oil production in 2013. That's up 29% from 2012 when production was ~4,900 b/d. Oil and gas sales increased by 7% in 2013 to $422.6 million from $394.6 million in 2012. 

Comstock 2013 Highlights

  • 63 gross (42 net) Eagle Ford Shale wells completed
  • 75 horizontal oil wells (51.6 net) and two horizontal natural gas wells (2.0 net) drilled
  • Average Eagle Ford completed well had an IP rate of 780 boe/d
  • Highest producing well was drilled in McMullen County - Gloria Wheeler C #3H - 1,340 boe/d
  • Spent $343.6 million on its continuing development and exploration
  • Invested $137.0 million on acreage acquisitions
  • Crude oil sales volume grew to ~6,300 b/d


Forest Oil Targets the Eagle Ford's Upper Interval

Forest Oil Eagle Ford Acreage Map
Forest Oil Eagle Ford Acreage Map

Forest Oil has doubled 30-day initial production rates by targeting the upper interval of the Eagle Ford and completing wells with smaller frack stages. Production from recent wells has yielded 30-day IP rates of more than than 465 boe/d. That's up from a little more than 200 boe/d from initial development wells. Forest's well improvements are just one example of how operators will continue to improve well performance and recoveries in the Eagle Ford.

Read more from from the quarterly call at our Forest Oil Eagle Ford page.

Chesapeake Shifts One-Third of Capital to the Eagle Ford - Production Hits 75,000 boe/d

Chesapeake Energy's Eagle Ford assets will receive 30% of the company's capital budget in 2012 and 40% in 2013. The company is shifting capital from natural gas developments to oil in areas like the Eagle Ford and the Utica. Low natural gas prices are driving the shift to oil for many operators. Natural gas focused companies like Chesapeake are literally evolving before our eyes. The company grew crude oil production in the Eagle Ford from 25,000 b/d at the end of the year to over 55,000 b/d at the end of April. Bringing 30,000 b/d of crude onto the market in just a few short months is no small feat.

2012 and 2013 are proving to be very important years for the company's Eagle Ford assets. CHK is building an oil production base that will support development for years to come.

The company also plans on raising capital in the next few months by selling a volumetric production payment (VPP) related to the Eagle Ford. A VPP allows Chesapeake to recover some of its capital investment by selling future production today. VPP's usually have a prescribed time period and a prescribed volume. When those two obligations are met, existing production will revert back to Chesapeake.

Also, expect the company to slow down in terms of drilling activity in the next few months. Current plans only call for an average of 30 rigs running in 2012. As of last week, the company had 35 active, so they'll need to drop 7-10 rigs in the last half of the year to meet their current guidance.

Read additional quarterly commentary at our Chesapeake Eagle Ford page.

Cabot Oil & Gas - Eagle Ford Down Spacing Success at 55-Acres

Cabot Oil & Gas' Eagle Ford acreage in the Buckhorn area of Frio and La Salle counties will likely be developed on 55-acre well spacing (or less). Two wells tested at 400 ft spacing between 5,900 ft laterals came on line at 790 boe/d. At lower spacing intervals, Cabot has 550-700 Eagle Ford locations in the Buckhorn area alone. That compares well to the previous seven development wells drilled in the Eagle Ford that came online at 860 boe/d. When compared to the average of all 30 wells Cabot has drilled, these were better. The company didn't attribute the improvement to any one factor, but better completion designs developed at the end of last year likely played a role.

This won't be the last time you hear about operational improvements from companies. Expect major efficiency gains in 2012. Operators are just beginning to hit their stride.

Check out the company's acreage map and read more about their position at Cabot's Eagle Ford page.