U.S. Energy Corp. Provides Operations Update For Buda Limestone Wells

April 10, 2014 Kirk Eggleston

U.S. Energy Corp. Oil & Gas Project Area Map

This week, U.S Energy Corp. provided its operations update for several of it's Zavala and Dimmit County wells targeting the Buda Limestone formation, which lies just underneath the Eagle Ford Shale. The Beeler #6H well, located in the company's Booth-Tortuga acreage block, was completed in March 2014, and had a peak early 24-hour flow back rate of 1,185 boe/d, with a 91% oil yield. The company has a 30% working interest and a 22.5% net revenue interest in 12,457 acres of the Booth-Tortuga acreage block. Contango Oil & Gas Company is the operator.

U.S. Energy Corp. also participates with U.S. Enercorp in approximately 4,243 gross (636 net) acres in the Big Wells acreage block in Dimmit County, TX. The leasehold is contiguous to the southwestern portion of the Booth-Tortuga acreage block.

“Having participated in six Buda wells with Contango and two with U.S. Enercorp., we are now beginning to gain a broader understanding of the extent of the play as well as the production response rates. Looking forward, we remain optimistic about the overall potential of the Booth-Tortuga and Big Wells prospects yet we still have much more drilling to do to fully understand the extent of the natural fractures in the region. Additionally, we believe that the potential exists to enhance the production profiles of our wells through down hole stimulation as warranted.”

— U.S. Energy Corp. CEO, Keith Larsen

U.S. Energy Corp. Buda Limestone Well Spud Dates

Beeler #8H (Contango, Operator)

Spud on 2.06.14 - peak early 24-hour flow back rate of 886 boe/d; 30-day average production of 347 boe/d

Willerson #2H (U.S. Enercorp, Operator)

Spud on 2.03.14 - peak early 24-hour flow back rate of 634 boe/d

Beeler #6H (Contango, Operator)

Spud on 2.10.14 - peak early 24-hour flow back rate of 1,185 boe/d

Beeler #5H ST (Contango, Operator) & Beeler Unit A #9H (Contango, Operator)

Spud on 3.25.14 and 3.26.14 respectively. Currently these wells are being drilled to their target depths.

Newfield's Eagle Ford Production Is Set to Surge at Year-end

December 4, 2013 R.T. Dukes

Newfield Exploration's Eagle Ford production grew 9% from the second quarter to the third quarter to average 8,200 boe/d. Fourth quarter production is expected to surge to more than 12,000 boe/d as well pads in the West Asherton area come online.

Growth in the last few months of the year puts Newfield on pace to grow production 70% year over year. The company's production is approximately 56% oil, 19% NGLs, and 24% natural gas.

Newfield is drilling horizontal laterals that range from 5,000-10,000 ft in the West Asherton Field in Dimmit County and has been able to drive well costs down approximately 20% to $7.3 million.

“We have even greater confidence in our ability to hit our corporate level targets and we intend to deliver on our promise of doubling liquids production from our four key plays by the end of 2015.”

— Lee K. Boothby, CEO

Newfield Plans Fewer Wells, but Strong Growth in 2014

Newfield lowered its operated rig count from two to one in the third quarter.

The company plans to drill fewer wells next year, 20 in 2014 compared to 36 in 2013, but still expects play-wide production to grow 30%.

Read the company's third quarter press release at newfield.com

Forest Oil Will Double Oil Production in 2014 - Securing Eagle Ford Acreage

December 3, 2013 R.T. Dukes

Forest Oil Eagle Ford Acreage Map Year-end 2013

Forest Oil expects to grow company-wide production by 11% next year, with oil production growing 90-100%.

Sales volumes from the Eagle Ford will drive growth. The company expects production from South Texas to more than double to 6,250 boe/d in 2014.

Forest is planning to spend 77% of its $290-310 million capital budget in the Eagle Ford.

A budget of ~$230 million includes the drilling of 80 gross (40 net) Eagle Ford wells. Forest will operate three rigs in the Eagle Ford and one in the Ark-La-Tex Basin.

“Following the completion of the Texas Panhandle asset sale, we are focused on the development and expansion of our Eagle Ford operations along with attention to our asset positions in Ark-La-Tex and the Permian Basin.”

— Patrick R. McDonald, President and CEO

Well Costs Fall & Forest Looks To Add Acreage

Forest Oil Eagle Ford Pad Drilling Graphic

Well costs fell 10% in the third quarter to $5.75 million. The company expects additional savings through pad drilling, centralized production facilities, and continued optimization of completions.

Forest will transition to development drilling early next year once its acreage position is held-by-production.

Once acreage is held, Forest will focus on determining the optimal drilling density and well spacing for each area of the field.

Mr. McDonald further stated, “...We are presently seeking opportunities to add acreage to increase the scale of our Eagle Ford resource development opportunity.”

Read the full press release at forestoil.com

Swift Energy Is Pumping More Fluid & Proppant in Eagle Ford Completions

October 31, 2013 R.T. Dukes

Swift Energy is testing higher volumes of fluid and proppant in Eagle Ford well completions. The company's number of Eagle Ford completions actually slowed to nine in the third quarter, but production grew due to better well performance.

The company's best well on a boe basis in the third quarter produced over 2,300 boe/d. The completion method utilized on the well included 25% more fluid and proppant. Completion testing didn't stop there.

In a well completed in the fourth quarter, the company tested tighter frac stage intervals and perforation clusters along with fluid and proppant volumes that were double Swift's standard completion. The well performed better than previous wells in the area (~1,600 boe/d at 2,250 PSI), so watch for Swift to begin using a completion design that looks more like what we've seen from EOG.

Swift is now targeting a lower interval of the Eagle Ford and is logging the horizontal section of every well to place completions in the most optimal portions of the wellbore.

“Further, we are optimizing our completion designs with longer lateral lengths, increases in frac stages and the volume of frac sand to increase initial production rates and cumulative production of Eagle Ford shale horizontal wells. We expect continued performance and efficiency improvements as we exploit these relationships in our drilling program.”

— Terry Swift, CEO

Swift grew company-wide production by ~10% in the quarter and continues to deploy approximately 80% of its development capital in the Eagle Ford. The company is also marketing assets in Central Louisiana to fund aggressive development plans in South Texas.

EXCO's Eagle Ford Results Are Meeting Expectations - Manufacturing Mode Coming

October 30, 2013 R.T. Dukes

EXCO Resources completed the acquisition of Eagle Ford assets in the third quarter and ended September producing approximately 7,600 boe/d from the play.

Immediately following the Chesapeake deal, the company sold a 50% interest in the undeveloped portion of acquired assets to KKR for $131 million, so the two are partners with CNOOC in the Eagle Ford.

EXCO, as the operator, plans to run 4-5 rigs in full development mode and expects to drive down costs by leveraging what the company has learned through its "manufacturing" approach in other shale plays.

“Our acquisitions in the Haynesville and Eagle Ford shales support our strategy to grow in our core areas, add to our oil production, and use our outstanding operating expertise. We have begun our development program in the Eagle Ford through the drilling partnership with KKR. Our early drilling and completion results are meeting our expectations, and we plan to quickly implement a manufacturing program on both the Eagle Ford and Haynesville assets.”

— Douglas H. Miller, CEO

EXCO acquired 55,000 net acres from Chesapeake in July and entered a farm out agreement on another 147,00 acres.

EXCO then sold a 50% interest in the undeveloped acreage to KKR for $131 million. KKR owns half of the acquired interest in undeveloped properties and EXCO will assign half of its remaining interest to the company as each well is drilled. KKR will fund and own up to 75% of each well and EXCO will fund and own 25%. EXCO then has the right to purchase wells in batches from KKR starting in the first quarter of 2015.

Read the full press release at excoresources.com