Eagle Ford's Sanchez Energy Reports Record Revenue in Q2 2014

August 13, 2014 Kirk Eggleston

Eagle Ford-focused Sanchez Energy reported record revenue of $151.7 million in the second quarter of 2014, with portfolio-wide production increasing 164% year-over-year to 20,437 boe/d.

At the end of the quarter, the company closed its massive Eagle Ford acreage deal with Royal Dutch Shell for 106,000 net Eagle Ford acres in Catarina. The acquisition almost doubled the company's acreage in the play. Total purchase price for the acquisition was approximately $639 million, less approximately $85.5 million in normal and customary closing adjustments.

“As of August 1, 2014, Sanchez Energy has officially taken over all operations at Catarina after a brief transition period with Shell. The transition of operations has gone smoothly and the ramp up of Sanchez Energy operations is ahead of schedule. We have fully staffed our operations at Catarina and now have drilling, completion, and artificial lift installation in progress. Additionally, now that we have achieved critical scale from the Catarina assets, we are utilizing a dedicated frac spread as well as direct sourcing of chemicals and proppant. We expect these factors will reduce completions costs by an additional 30%, allowing flexibility to increase fracture stage size or improve returns from a lower development cost.”

— Sanchez CEO, Tony Sanchez, III

With the Catarina acquisition, Sanchez increased its proved reserves 170% to approximately 117 MMBOE as of June 30, 2014. Crude oil constituted 49% and NGLs constituted 24% of the company's proved reserves. 56% of the company's proved reserves were classified as proved undeveloped, compared to 70% at same time last year.

Sanchez Eagle Ford Q2 Operations Update

Sanchez Energy currently has 6 gross rigs running across its Eagle Ford acreage, with 419 gross producing wells and 38 gross wells in various stages of completion.

By area, the company's Cotulla, Marquis, and Palmetto Eagle Ford operating areas comprised approximately 42% of the crude oil cut from total second quarter 2014 production volumes. Company officials expect the percentage of oil expected in the company's third quarter production volumes should decrease as the impact of the production volumes from Catarina are recorded.

The company's third quarter production guidance range portfolio-wide of 37,000 to 41,000 boe/d has been revised to 36,000 to 40,000 BOE/D while its fourth quarter production guidance range of 45,000 to 49,000 boe/d has increased to 48,000 to 50,000 boe/d. Production guidance for 2015 remains the same at a range of 53,000 boe/d to 58,000 boe/d.

ConocoPhillips Raises Eagle Ford Reserve Estimates By 39% to 2.5 Billion BOE

April 15, 2014 Kirk Eggleston

ConocoPhillips increased its Eagle Ford reserve estimates in early April 2014 by 39% from 1.8 billion to 2.5 billion bbls of oil in place. Company officials say production is expected to exceed 250,000 boe/d in the Eagle Ford by 2017. That's nearly 100,000 more BOE than the company's target goal at the end of 2013.

“ConocoPhillips’ wells in the Eagle Ford have the highest oil rates per well and are leading the industry in value. This is attributable not only to the fact that we are in the best part of the play, but also to our relentless focus on technical innovation and drilling and completion cost efficiencies,” Lance said. “We are applying these benefits and efficiencies across our unconventional portfolio in the Bakken, Permian, Niobrara, Canada, and outside of North America.”

— ConocoPhillips CEO, Ryan Lance

ConocoPhillips' Eagle Ford acreage is in a prime part of the Eagle Ford, with much of it centered in Karnes and Live Oak counties. The company has 221 M net acres across its' Eagle Ford portfolio, with more than 3,000 identified drilling locations. ConocoPhillips' has a 96% average operated working interest in its Eagle Ford wells.

In 2014, ConcoPhillips plans to spend $4.3 billion on the Bakken, Eagle Ford and Niobrara Shale. Drilling costs and completion costs have decreased by 37% and 41% consecutively since 2010 in the Eagle Ford.

ConocoPhillips' Highlights

ConocoPhillips pushes Eagle Ford reserves estimates up 39% to 2.5 billion bbls of oil in place
ConocoPhillips predicts 250,000 boe/d by 2017
More than 3,000 prospective drilling locations identified
Drilling and completion costs down 37% and 41% consecutively

EOG's Burrow Unit 5H Well Better Than First Reported

August 7, 2013 R.T. Dukes

EOG Eagle Ford Oil Well Record Production

We published details from the Texas RRC completion report related to EOG's record Eagle Ford well, but the company's second quarter operations update proved the well was better than first reported.

EOG reported the well came online at more than 9,200 boe/d. That compares favorably to the 8,600 boe/d that was reported to the commission. Better yet, the well was still producing more than 4,200 barrels of oil per day after 30 days. The well is easily the best in the Eagle Ford to date.

The well easily produced more than 150,000 barrels of oil in its first month online!

Eagle Ford Growth Leads To Company-wide Increase In Guidance

As a result of performance in the company's liquids plays (i.e. Bakken & Eagle Ford), EOG is increasing annual crude oil production guidance from 28% to 35%.

“We have the confidence to raise the bar on EOG’s performance expectations because our outstanding assets perform better and better, quarter after quarter,” said CEO William R. “Bill” Thomas. “EOG expects to achieve these higher goals within our previously stated capex estimate.”

t the end of the second quarter, EOG was producing 173,000 boe/d from the Eagle Ford and had more than doubled initial production rates across much of the play.

The company highlighted several wells across La Salle, McMullen, and Gonzales counties that produced ~1,500 barrels of oil per day or more. The record Burrow 5H well was part of a unit that had two other wells come online at ~3,000 b/d of oil. It's easy to see why the company is increasing its production guidance.

“With wells in our western drilling program following the same trend as those in the east, results from the EOG’s Eagle Ford activity continue to outpace our expectations.”

— Papa

Chesapeake's Eagle Ford Performance Drives Oil Production Guidance Increase

August 2, 2013 R.T. Dukes

Chesapeake Energy Oil Gas Production Graph

Chesapeake has increased it oil production guidance for the year by 1 million barrels to 38-40 million barrels as more wells have come online in the Eagle Ford.

The companyconnected 140 wells to sales in the second quarter and averaged production of 190,000 gross (85,000 net) boe/d. Approximately 66% or almost 57,000 b/d of the production stream is crude oil. The number of wells brought to sales is up from 111 in the first quarter and production is up 14% from that period.

“We are raising our full-year 2013 oil production guidance by 1 million barrels (mmbbls) to 38 – 40 mmbbls, representing a growth rate of 22 to 28% year over year, due to good well performance,an accelerated pace of well completions in the Eagle Ford Shale and timing of asset sales.”

— Steve Dixon, COO

Chesapeake is running 15 rigs in the Eagle Ford currently, but plans to reduce it's rig count to 10 by the end of they year. The average time from spud to spud (drilling start to drilling start) in the Eagle Ford has fallen to 16 days from 21 a year ago. After the completion of the sale of acreage to EXCO, most of Chesapeake's acreage is held by production. Now, the company will shift to more efficient pad drilling across the play.

Chesapeake & EXCO Reach Eagle Ford Deal Worth $680 Million

Chesapeake Has Drilled Almost 1,000 Wells To Date

Chesapeake has drilled 963 wells as of the end of the second quarter.

795 wells are producing
144 wells are in some stage of completion
24 wells are waiting for pipeline connection

The average well brought online in the second quarter produced an average of 900 boe/d.

Shell's Production Growth Focused in North America

February 6, 2012 R.T. Dukes

Shell's Eagle Ford Shale assets will undoubtedly be a major part of the company's guidance to grow production by 25% by 2017-2018. 80% of Shell's capital budget will be spent on upstream development and 60% of that will be spent in North America and Australia. The company's largest North American development areas are in the Pinedale Field of Wyoming, Eagle Ford Shale of South Texas, and the Marcellus Shale of the Northeast U.S.

Voser commented: “We have worked hard to generate a strong pipeline of investment opportunities for Shell, and we put the emphasis firmly on a competitive financial performance. Shell’s investment programmes create cashflow growth, which in turn funds our dividends. All of this is supported by efficiency gains from our continuous improvement programmes, where the opportunity set runs to billions of dollars for Shell.”

Net capital investment will be some $30 billion in 2012, with over ~80% Upstream, of which 60% will be in North America and Australia. We continue to mature further development opportunities, with Final Investment Decision on 17 new projects in 2010-11. In 2011, the company has built new positions including Iraq gas, Asia Pacific LNG, liquids-rich shales, and new exploration acreage in 10 countries. This portfolio growth supports our increased investment program and updated growth outlook.

Read the entire press release at shell.com