Chesapeake's Eagle Ford Shale Production Tops 20,000 boe/d

Chesapeake's Eagle Ford Shale asset is garnering much of the company's attention in 2012. To the tune of almost 25% of the company's capital, with 33 of the company's 161 rigs focused in the Eagle Ford. Total net production averaged a little less than 18,000 boe/d net in the fourth quarter of 2011 and current production stands at 22,600 boe/d net. Production was up 60% quarter over quarter and 370% year over year. (You can get pretty amazing growth rates running 33 rigs) Gross operated production is close to passing 50,000 boe/d and stands at a little over 45,000 boe/d. CNOOC owns a 33% interest in Chesapeake's acreage, so net will always be a close to 50% when you account for royalties and other WI owners.

The production mix is 50% crude, 20% NGLs, and 30% natural gas. That will likely stay the same for some time unless the company begins to target the natural gas rich Pearsall Shale......and that's not happening at sub-$3 gas prices.

Well performance in the Eagle Ford continues to improve.

108 wells tested with peak oil rates of 500 barrels of oil or more

The company has drilled and is producing from 178 wells and has 200 additional wells close to coming to production. That is the main reason for adding almost 350 miles of pipelines in 2011 and plans for further expansions in 2012. It will be needed for the volumes of oil and gas the company plans to bring online.

Chesapeake will also add frack crews during 2012. 7 company crews are running now and that will grow to 11 by March and 13 by year-end. That should make them virtually self sufficient when it comes to fracking Eagle Ford wells.

Chesapeake has more than 400,000 net acres in the Eagle Ford primarily located in the oil window of the Maverick Basin.

Read the company's press release at chk.com

Anadarko Petroleum Q3 Operations Update

Anadarko Petroleum announced third quarter earnings today (Nov. 1) along with an operations update. In the Eagle Ford, the company grew production to more than 66,000 boe/d, which is almost 50% quarter over quarter growth and up from a just over 25,000 boe/d in the 2010 third quarter. The company operated 11 rigs, with one being a spudder rig. Those 11 rigs commenced drilling 56 wells, while Anadarko brought 37 wells to production.

The Korea National Oil Company (KNOC) owns a 33% in Anadarko's Maverick Basin Eagle Ford assets.  

Anadarko exited the quarter with gross production of 66,000 BOE/d, which   represents growth of 47% over the 2nd quarter exit rate of 45,000 BOE/d. For the quarter, oil sales volumes increased almost 150% compared to the sam period in 2010.

During the quarter, the company spud 56 wells using 10 rigs and one  spudder rig, and achieved first production from 37 wells.

Anadarko initiated delivery to the Copano pipeline during the quarter and now has three main gathering and processing systems available for natural gas delivery.

Read the entire press release at anadarko.com

Newfield Q3 2011 Operations Update - Well Results and Costs

Newfield Exploration announced its third quarter earnings along with an update on its Eagle Ford operations. The company has a 335,000 acre position in the Maverick Basin across Dimmit, Maverick, and Zavala counties. Drilling is currently focused in the southern portion of the company's acreage where infrastructure is accessible. The company also has a pilot program active in the West Asherton area in Dimmit County. The company has completed 16 wells that have produced 650 barrels of oil equivalent in the first 24 hours. The wells have expected EUR's of 300,000 barrels. Wells have been drilled in as little as 7 days at average costs of $6.6 million for drilling and completion.

The Eagle Ford is the primary drilling target for the company, but Newfield has completed 6 wells targeting the Georgetown formation and 2 wells targeting the Pearsall Shale. The company currently produces more than 7,000 barrels of oil equivalent per day from the area.

Read more at our Newfield Exploration Eagle Ford Profile

Loreto Resources - Eagleford Energy Reach Joint Venture Agreement

Loreto Resources and Eagleford Energy have come to an agreement on a potential joint venture. Loreto will have the opportunity to earn a 50% working interest on two leases in Zavala County, TX. In Petrohawk's Q2 conference call, the company announced it was suspending drilling operations at Red Hawk in favor of other producing areas. Read more in our post titled: Petrohawk Abandons the Red Hawk Field. Watch to see if Loreto Resources and Eagleford Energy are able to make a commercial play in Zavala County. Secondary formations such as the Austin Chalk and Buda may become the primary drilling targets.

Loreto Resources Corporation (OTC: LRTC) ("Loreto") today announced that it has signed a non-binding letter of intent with Eagleford Energy Inc. ("Eagleford"), under which Loreto would have the right to farm in to an up to 50% working interest in Eagleford's net working interests in the Matthews Lease and the Murphy Lease in Zavala County, Texas. Key highlights of the letter of intent are as follows:

• Farm-in agreement would cover 5,266 gross acres in the Eagle Ford light oil shale play in the Maverick Basin.
• Drill results on both leases indicate potential for significant volumes of recoverable light oil in the Eagle Ford Shale, Austin Chalk and Buda formations based on core samples, log analysis and analogue modeling by Weatherford International.
• The Matthews Lease is contiguous to the Petrohawk Energy Corporation Red Hawk Land Block, which has shown average initial production rates per well from wells targeting only the Eagle Ford Shale of 375 barrels of oil per day, according to Petrohawk.
• Accelerated work program currently anticipated to include (i) the completion, fracturing and tie in of the Matthews/Dyami #1-H horizontal test well with up to a 15 stage fracture stimulation utilizing a Baker Hughes shot point sleeve, (ii) drilling of a second vertical well on the Murphy Lease which is currently drilling; and (iii) the fracturing, tie in and completion of two Murphy vertical wells.

Read the full press release at prnewswire.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