Eagle Ford Production Expected to Decline

March 12, 2015 Elizabeth Alford

2014 was a record breaking year as shale oil production across the United States surged, but a new report suggests that trend may be shifting.

U.S. gains increased at least 100,000 barrels per day for 10 of the last 16 months. The Eagle Ford saw the same surges, as production increased from approximately 1,2 million barrels daily in 2014 and to over 1.7 million last month.

Even the weekly loses of oil rigs since October hasn’t stopped production from soaring into numbers that have contributed significantly to a worldwide surplus. But this record streak may be coming to an end.

The U.S. Energy Information Administration (EIA) released a report on Monday that predicts oil production in the Eagle Ford Shale will dip in April, and possibly usher in a new trend of slower production. EIA analysts say that the Eagle Ford will produce 1.72 million barrels daily of crude oil and other liquids in April, down from an average of 1.73 million barrels daily this month.

Across the country, production from the six largest shale plays will hit 5.6 million barrels per day in April, which will be the smallest increase since February 2011.

This anticipated decline hasn't changed the fact that reserves are still very high. EIA reports that stockpiles grew by 4.5 million barrels last week brining the U.S. reserves to 449 million barrels of oil in storage. It has been at least 80 years since the level has been this high.

Anadarko's Eagle Ford Resource Estimate Swells to 600 mmboe

May 1, 2012 R.T. Dukes

Anadarko Petroleum increased the number of identified Eagle Ford well locations to 4,000 and increased its resource estimate to 600 million barrels of oil equivalent. That means total resource from the company's 400,000+ gross acres will stretch to more than 1 billion boe. Anadarko is partnered with KNOC across its Eagle Ford acreage. Anadarko also reached record production in the quarter. The company averaged more than 30,200 boe/d for an entire week. Sales volumes averaged 12,000 b/d of oil, 6,000 b/d of NGLs, and 59 mmcf/d of natural gas during the quarter.

The Brasada gas processing plant is also in service as of the first quarter. The plant has current capacity of 200 mmcf/d, but will have ultimate capacity of 455 mmcf/d when construction is completed in mid-2013.

Read more at our Anadarko Petroleum Eagle Ford Shale page.

EOG Eagle Ford Reserves Potential Jumps 700 mmboe to 1.6 Billion Barrels

February 17, 2012 R.T. Dukes

EOG Resources' Eagle Ford Shale assets continue to outperform. The company announced an increase in potential recoverable reserves of 700 million barrels. That brings EOG's Eagle Ford reserve potential up to 1.6 billion barrels. The catalyst was successful testing of tighter well spacing.

U.S. proved oil reserves are just over 20 billion barrels, so a 1.6 billion barrel addition, from a single company, is significant to say the least.

Strong Initial Production Rates at 65-Acre Spacing

EOG reported monster wells from two of its 65-acre test units.

In Gonzales County, the Henkhaus Unit #1H, #2H, #3H, #4H, #6H and #7H wells were drilled on a pattern of 65-acre spacing. The six wells were completed to sales at individual initial production rates ranging from 2,424 to 3,733 barrels of oil per day (Bopd) with 442 to 679 barrels per day (Bpd) of natural gas liquids (NGLs) and 2.2 to 3.4 million cubic feet per day (MMcfd) of natural gas per well. The Mitchell Unit #3H, #4H, #5H, #6H, #7H and #8H wells, which were also drilled as down-spaced pilots, began initial production at 2,833 to 3,527 Bopd with 275 to 485 Bpd of NGLs and 1.4 to 2.4 MMcfd of natural gas per well. The Meyer #3H, #4H, #5H, #8H and #9H wells had individual peak oil rates ranging from 1,647 to 2,813 Bopd with 199 to 413 Bpd of NGLs and 1.0 to 2.1 MMcfd of natural gas.

The results are a great sign for EOG, but a bad sign for natural gas fundamentals. If oil rigs are bringing on wells with 1-3.4 mmcfd of gas production, dropping gas rigs just got a little less important.

EOG Downspacing for Greater Oil Recovery Rates

The company originally planned for 130-acre spacing, but now believes it will develop the field at 65 to 90-acre spacing. The recovery factor in the field is now pegged at 6%. With a total of almost 28 BnBoe of oil in place and 3,200 wells left in the company's inventory, I'm guessing there will be a lot of things learned over the course of the next few years that will only increase the recovery factor.

The company has built its knowledge and understanding of the play by drilling more than 375 wells to date. EOG only trails Chesapeake in terms of drilling and has 26 rigs working the area as of February 2012.

EOG exited the year with more than 66,000 boe/d of production (78% crude oil) in the Eagle Ford. Total crude production eclipse 50,000 b/d for the first time and, with the activity EOG has planned, it will likely be in the rearview mirror for some time to come.

A highlights include:

3,000 b/d IP rates
1.6 BnBoe of Reserves after Royalty might be the largest discovery since Prudhoe Bay in the 1960s
3,200 wells yet to be drilled in the Eagle Ford
Almost 28 BnBoe of oil in place
Targeting $5.5 million well costs with 4,000 ft laterals
Self sourced sand and frac crews contribute a 80% ATROR

If you want to listen in on the conference call, it's at 8 am central and can be accessed through the company's website.