Goodrich Increases 2014 Budget by 50% & Is Shifting to the Tuscaloosa Marine Shale

Goodrich Petroleum Eagle Ford and Pearsall Activity Map

Goodrich Petroleum will spend 44% or $100 million of the company's $255 million budget in 2013 in the Eagle Ford. That will change in 2014 when the company will spend just $30 million in the play.

The company plans to spend almost 50% more on development in 2014, but almost 75% or $300 million of the company's $375 million budget will be spent in the Tuscaloosa Marine Shale (TMS).

The Eagle Ford has helped drive an increase in oil production, but Goodrich only controls 45,000 gross (32,000 net) acres in the play. In the TMS, Goodrich controls more than 300,000 net acres across Louisiana and Mississippi. The shear size of the company's position makes the potential much greater.

Read the company's full release regarding its 2014 budget at goodrichpetroleum.com

Halcon Allocating More Capital To Its Brazos County Eagle Ford Development

Halcon Eagle Ford Activity Map

Halcon announced plans to spend $100 million targeting the Eagle Ford in Brazos County in 2013 just two months ago. Now, the company might spend double or triple that number.

The company didn't say how much more capital would be allocated to the play, but said "capital is being reallocated to El Halcon from the Woodbine..."

When plans were to spend $100 million in the play, Halcon stated it would operate 1-3 rigs throughout the year. It's just June and the company already has 5 rigs working the play. The company had planned to spend ~$390 million in the Woodbine, so if we assume half of the capital is reallocated to the Eagle Ford, it is very likely Halcon will spend between $200-300 million this year alone.

Eagle Ford Laterals Getting Longer

The two most recent wells drilled in the area have average laterals of 8,349 ft and came online at more than 1,100 boe/d (94% oil) each. Those rates were achieved with a 16/64 choke and represent improvement of 18% over recent wells.

The Bison 1H well in Brazos County was drilled from spud to total depth in less than 11 days, including a 9,000+ ft lateral.

Halcon is also utilizing pad drilling where possible and set casing on three wells in just nine days.

Halcon has 9 wells producing in the area, 5 wells awaiting completion and 5 wells being drilled.

Highlights from the operations update weren't limited to the Eagle Ford, Halcon also announced a Bakken well that produced more than 3,000 boe/d. Read the full operations update at halconresources.com

Where Are Oil & Natural Gas Prices Headed? Gary Evans of MHR

Where are natural gas prices and oil prices headed in 2013? Gary Evans discusses his view US oil & gas prices.

Notes from the interview include:

• Need cold weather for natural gas prices to recover
• The industry needs $4 natural gas prices
• Technology has allowed for recent shale boom
• China and India are thirsty for oil
• The US is producing more than 50% of what it consumes
• WTI to Brent spread allowed for the recent run up in oil prices
• Not bullish on oil prices, but expects more upside to natural gas
• Difficulty in leasing is really a federal lands issue

Do you agree or disagree? Share your thoughts in the comments below.

Eagle Ford Oil Boom - Natural Gas Slump - EagleFordShale.com Quoted

Eagle Ford oil potential has kept drillers interested and even shifting capital to the play over the past year. Both oil and gas prices are up over the past few weeks, but comparatively $92/bbl is much better than $3/mcf. Read the entire article that details rig activity and production growth at chron.com

R.T. Dukes, a director at the website EagleFordShale.com, which posts news about the shale, said oil companies' budgets "are being pressured by natural gas prices, but drilling activity hasn't really slowed down in the Eagle Ford." However, if the price of oil should drop again and gas prices remain low, "you'll probably see some sort of slowdown in the second half of the year."

Yet Dukes remains bullish on the Eagle Ford.

"It's a first-class play in the United States," he said. "That usually doesn't change over short periods of time. On a relative basis, it's still better than most plays in the U.S.," he said.

Should natural gas prices go much higher, "you'll see additional capital come to the Eagle Ford," he said.

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