Penn Virginia Invests in the Eagle Ford

May 28, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Penn Virginia 2015 Q1

Penn Virginia Corp. released its first quarter update last week, showing its Eagle Ford operations the big star.

Realated: Penn Virginia Upper Eagle Ford Production Taking Off

Since moving into the Eagle Ford in 2010, Penn Virginia has focused a great deal of its resources on the area. For the first quarter of 2015, the Eagle Ford accounted for 87% of the company's production (21,390 BOEPD of 24,721 BOEPD). Looking ahead, 96% of 2015 spending will go towards Eagle Ford development.

Q1 Highlights

Total production increased 17% over the first quarter of 2014
25% Decrease in Average Eagle Ford Well Cost Since Early Fourth Quarter 2014
Decrease for unit production costs: $10.68 per BOE from $11.52 per BOE.
Over the past 12 months, 23 Upper Eagle Ford wells have been brought on line

“While continuing to increase production, our primary focus has been on cutting well costs and improving our operational execution,” said H. Baird Whitehead, President and Chief Executive Officer of Penn Virginia, in a conference call following the release. “With 23 wells completed over the past 12 months, we feel that we have successfully de-risked the Upper Eagle Ford across much of our acreage and have achieved excellent average results.”

As of October 2014, Penn Virginia had approximately 145,500 gross acres in the Eagle Ford Shale play in Gonzales and Lavaca Counties, Texas. Read more about Penn Virginia in the Eagle Ford

Penn Virginia Upper Eagle Ford Production Taking Off

July 31, 2014 Kirk Eggleston

Penn Virginia Corp.'s second-quarter report revealed a decrease in its full-year production guidance portfolio-wide. Company officials cited operational complexities associated with pad drilling and the timing of completions as the primary reasons for the decrease.

Despite lowering its guidance, Penn Virginia's second quarter Eagle Ford production was up 6% to 15,618 boe/d (75% oil cut), compared to 14,761 boe/d in the previous quarter. And Upper Eagle Ford production in the company's Marl position has also been very positive, according to company officials.

In June of 2014, Penn Virginia's average Eagle Ford production was 16,861 boe/d (74% oil cut). The company's average Eagle Ford production in July 2014 is estimated at 18,100 boe/d. Year-to-date, Penn Virginia has turned in line 43 (28.0 net) operated wells, excluding shallow wells.

“We have expanded our ongoing pad drilling program in the Eagle Ford and are encouraged by our recent results in the play, especially our results in the Upper Eagle Ford. We are modestly reducing our full-year production guidance, but we remain confident that we can deliver significantly higher production levels in the second half of 2014 as we realize the ongoing benefit of our pad completions and rig expansions along with an increased focus on the Upper Eagle Ford.”

— Penn Virginia CEO, H. Baird Whitehead

Penn Virginia Upper Eagle Ford Update

To date, the company has tested three Upper Eagle Ford wells, including the Welhausen #A2H, which had an initial production (IP) rate of 2,165 boe/d. At the release of this post, the Welhausen #A2H average rate is 1,070 boe/d, since being turned to sales in March of 2014.

Company officials believe the Upper Eagle Ford and Lower Eagle Ford are separate reservoirs in the specific areas around the three Upper Eagle Ford test wells. According to company officials, this theory has been based on performance comparisons between adjacent Lower Eagle Ford wells to the Upper Eagle Ford test wells. Penn Virginia plans to spud 19 additional Upper Eagle Ford wells, with eight scheduled in the Welhausen area.

Devon Banking on High Returns from Eagle Ford Investment

May 28, 2014 Kirk Eggleston

After closing its $6 billion transaction with GeoSouthern for 82,000 net Eagle Ford acres at the end of February 2o14, Devon says its current net daily production in the play is 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Devon is banking on high returns from its hefty Eagle Ford investment, and so far, the company appears to be confident it will achieve a lucrative pay off.

At the UBS Oil & Gas Conference at the end of May of 2014, the company's COO, David Hager, revealed the Lavaca County acreage is performing better than expected. Currently, the company has 300 total preliminary locations targeted in the county. In DeWitt County, the company has 900 preliminary locations targeted.

“When we acquired [the Eagle Ford acreage], we placed over 90% of the value from an internal standpoint on DeWitt County. We didn’t put as much value on Lavaca County initially []. What we’re finding is the results aren’t quite as good as DeWitt County, but there are a lot better than we originally anticipated.”

— David Hager

Recently, another Eagle Ford operator, Penn Virginia, revealed strong 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 for Penn Virginia said in a quarterly update that the two wells have the highest wellhead flowing pressures the company has seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 – 6,000 standard cubic feet per barrel.

In 2014, Devon will drill approximately 230 wells across its Eagle Ford acreage position. About 200 of those wells are slated to be drilled in DeWitt County under a 50/50 partnership with BHP Billiton. The other 30 wells are to be drilled in Lavaca County, where Devon has a 100% working interest in the majority of the acreage. Also in 2014, look for Devon to drill some Upper Eagle Ford wells.

Penn Virginia Seeks to Expand Eagle Ford Position

May 13, 2014 Kirk Eggleston

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.

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.

Penn Virginia Grows Eagle Ford Position to 80,000 Net Acres in 2013

March 4, 2014 Kirk Eggleston

Penn-Virginia's Eagle Ford Shale proved reserves increased by 189% in 2013 to 75.6 mmboe (89% oil and NGLs). That's ~55% of the company's estimated total proved reserves.

The year-over-year increase in proved reserves was partially tied to a $401 million dollar deal in April 2013, when the company acquired ~40,600 gross (19,000 net) acres from Magnum Hunter Resources.

Overall, Penn-Virginia's Eagle Ford position grew 19% to 80,000 net acres in 2013. The company now has an estimated ~1,125 drilling locations.

“We continue to increase our core Eagle Ford Shale position through leasing at a cost of approximately $2,800 per net acre since early November. Our stated goal of 100,000 net acres in the Eagle Ford Shale remains intact and we remain confident this is achievable at attractive acquisition costs. As a result of [] successful downspaced drilling, we have increased our estimated drilling inventory by about 26 percent from 895 just a few months ago to the current estimate of approximately 1,125 drilling locations.”

— CEO, Baird Whitehead

Penn Virginia Fourth Quarter 2013 Eagle Ford Production

Penn Virginia had record oil production in the fourth-quarter of 11,139 b/d. Total production for the quarter was 13,111 boe/d. That's up ~5% from 12,489 boe/d.

During the quarter, the company decreased completion costs per well and increased productivity.

“Our well costs per frac stage decreased again, while our well productivity per stage increased as a result of pumping additional proppant and the continued use of multi-well pads and ‘zipper fracs.’ We will continue to implement advanced techniques to further optimize our well results and economics.”

— Whitehead

The peak average rate of production for 23 gross (12.3 net) of the company's most recent wells was 1,582 boe/d. 86% of production was oil. The average lateral length for these 23 operated wells 5,722 feet.

179 gross (116.7 net) wells were producing at the end of 2013. 13 gross (10.1 net) operated wells were being completed or awaiting completion at the end of the year. Two gross (0.9 net) outside operating wells were being completed. Six (4.2 net) operated wells being drilled.