ZaZa Energy Continues Laying Groundwork for Eagle Ford Growth

May 14, 2014 Kirk Eggleston

ZaZa's first quarter 2014 average combined production in the Eagle Ford (South Texas) and Eaglebine (East Texas) was 630 boe/d. The company has re-focused its attention to the Eaglebine, after divesting 10,300 net Eagle Ford acres in July of 2013 to a subsidiary of Sanchez Energy for $28.8 million. Approximately 82% of ZaZa's first quarter production came from the Eaglebine.

During the first-quarter, the company continued to position itself for growth across its portfolio. In May of 2014, ZaZa announced that its CEO, Todd Brooks, will be taking a salary of $1 dollar for the next two years. During that time frame, Brooks' compensation will consist of equity grants or other equity-related compensation.

“Through a series of transactions over the last two years, we have transformed ZaZa into a growth vehicle for emerging unconventional plays, particularly in East Texas. The elimination of my salary and adoption of STI and LTI performance hurdles for the next two years further aligns me with shareholders as we look forward to the delivery of continued production and reserves growth.”

— Todd Brooks

ZaZa Energy is currently operating at a net loss of $1.4 million, compared to $2.9 million last year at this time.

ZaZa Energy Eagle Ford First Quarter 2014 Operations Update

During the quarter, one of ZaZa's joint venture partners, Sabine South Texas LLC, completed its commitments to drill two horizontal wells in ZaZa's Sweet Home Prospect. The first commitment well was completed on February 14th and the second on March 11th. Sabine has now been assigned a 75% interest in 7600 net acres in the Sweet Home Prospect, and a well that ZaZa refers to as the "Boening well." Participating interests in any additional drilling or acquired lease acreage in the Sweet Home Prospect will be shared 75% by Sabine and 25% by ZaZa under an area of mutual interest agreement (AMI) that will expire during the third quarter.

ZaZa Energy Eaglebine First Quarter 2014 Operations Update

ZaZa entered into a further amendment of its joint venture with EOG Resources in the Eaglebine during the first quarter. Under the ammendment, ZaZa will receive ~$14 million and a two-well drilling commitment from EOG. As part of the agreement, EOG must begin drilling the first of two wells by July 1, 2014. In exchange, EOG will gain a 75% working interest in all of Zaza’s remaining acreage (9,600 net acres).

During the quarter, ZaZa acquired 5,000 net acres in Houston County and Southeastern Leon County in its core East Texas area. This acreage is currently held 100% by ZaZa.

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.

EOG Resources Boosts Eagle Ford Oil Production 62% Year Over Year

May 6, 2014 Kirk Eggleston

Eagle Ford Producer EOG Resources increased its crude oil production in the play by 62% in the first quarter of 2014 over the same reporting period last year. Portfolio-wide, company officials said total US crude oil and condensate production increased by 45%, with the Eagle Ford contributing the most to production volumes. As of March 31st, 2014, EOG's net Eagle Ford production was 207,000 boe/d.

In the first quarter, EOG entered its third and final phase of its joint venture agreement with ZaZa Energy in the Eaglebine. Plans were accelerated in the fourth quarter of 2013 to move into the second phase, which was a strong indication of the company's confidence from production in the area.

EOG Eagle Ford First Quarter Operations Update

EOG reported an average initial production (IP) rate for five Karnes County wells of 3,757 bbl/d crude oil. The Korth Unit #3H, #4H and #5H had IP rates of 3,140, 3,015 and 3,400 bbl/d, respectively. The Lynch Unit #1H and the Presley Unit #1H had initial oil rates of 4,260 and 4,970 bbl/d, respectively. EOG owns a 100% working interest in these five wells.

EOG also has a 100% working interest in three recently completed high volume oil wells in Gonzales County. The Neets Unit #1H and the Magoulas Unit #1H began production at 4,940 and 4,195 bbl/d, respectively. The Novosad Unit #12HR had an initial daily oil rate of 3,565 bbl/d.

EOG Resources has 632,000 net acres in the Eagle Ford, and in 2013, the company increased its Eagle Ford resource potential 45% to 3.2 billion boe from 2.2 billion boe. Company officials said EOG plans to add 400 million boe of net potential reserves and 735 net drilling locations to its drilling inventory in the Codell, Niobrara, Turner and Parkman plays in the Rockies in the coming years. That's a significant addition, but the Eagle Ford remains the top dog in EOG's portfolio.

Aurora Oil & Gas's Production Increases in the First Quarter of 2014

May 2, 2014 Kirk Eggleston

Eagle Ford-focused Aurora Oil & Gas, which will soon be absorbed by Baytex Energy, had first quarter estimated gross production of 28,600 (21,100 net) boe/d. That's a 54% increase over the first quarter of 2013, and a 16% increase over Aurora's fourth quarter production in the play.

In February of 2014, Baytex Energy agreed to purchase Aurora for $2.6 billion. When the deal closes, it will include 22,000 net contiguous acres in the Sugarkane Field. The acreage is located in what is commonly referred to as the "sweet spot" or oil window of the Eagle Ford Shale.

Aurora Oil & Gas Eagle Ford Q1 2014 Operations Update

During the first quarter, 32 gross new Eagle Ford wells (8.6 net) were put into production for a total of 419 gross producing wells (111.7 net). A total of 57 gross new wells (15 net) were spudded during the first quarter of 2014, and at the end of the quarter, drilling operations continued on 10 wells, while 29 wells were awaiting fracture stimulation.

Aurora's net acreage covers Karnes, Live Oak and Atascosa counties. Revenue from oil and gas sales in the first quarter was $182 million.

Aurora Oil & Gas Eagle Ford Q1 Highlights

54% increase over Q1 2013 to 28,600 (21,100 net) boe/d
16% increase Q4 production
Baytex Energy agreed to purchase Aurora for $2.6 billion
32 gross new Eagle Ford wells (8.6 net) were put into production
57 gross new wells (15 net) were spudded
Revenue from oil and gas sales in the first quarter was $182 million

Newfield Energy's Eagle Ford First Quarter Production and Operations Update

May 1, 2014 Kirk Eggleston

Newfield Energy's net production in the Eagle Ford was 11,000 boe/d in the first quarter of 2014. That's down slightly from the company's fourth quarter 2013 production when well pads in the company's West Asherton area first came online.

Newfield's Eagle Ford Operations Update

Newfield is currently running a single rig program to develop its West Ahserton field and Fashing area. In the first quarter of 2014, five Eagle Ford wells were placed online, with a 24-hour gross average initial production (IP) rate of 911 boe/d. The 30-day rate was 799 boe/d.

Production is expected to maintain current levels throughout 2014 and grow approximately 30% year-over-year in the play. Newfield plans to drill 20 wells during the year. Thats down from 29 wells in 2013.

Newfield's Ealge Ford First Quarter Highlights

11,000 boe/d in production
Single rig programming running to develop West Asherton Field and Fashing area
Five wells placed online