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.

SM Energy-Mitsui Eagle Ford Carry Ends

July 30, 2014 Kirk Eggleston

In SM Energy's second quarter earnings report released this week, the termination of the drilling and completion carry with its joint venture (JV) partner, Mitsui, was confirmed.

SM Energy is now responsible for funding its proportionate share of drilling and completion costs in the area. An increase in SM Energy's capital guidance for 2014 was announced in the company's first quarter earnings report to accommodate for the additional costs.

Mitsui's $680-million carry commitment in the Eagle Ford provided needed capital funding to accelerate SM's development in the play. SM Energy and Mitsui entered their Eagle Ford joint venture agreement in 2011.

SM Energy Eagle Ford Non-Operated Acreage Update

Net production in SM Energy's non-operated portion of its Eagle Ford shale program for the second quarter of 2014 averaged 23,800 boe/d. That's a 2% sequential increase over the first quarter of 2014 and a 37% increase year-over-year.

The operator made approximately 95 flowing completions during the second quarter.

SM Energy Eagle Ford Update in Operated Acreage

During the second quarter, SM Energy made 23 flowing completions in its operated Eagle Ford Shale program. The company's operated net production in the Eagle Ford shale averaged 83, 200 boe/d in the second quarter of 2014. That's a 9% sequential increase from the previous quarter and a 26% increase year-over-year.

SM Energy Sand Loading Tests Yield Positive Results

SM Energy has been shifting its Eagle Ford drilling and completion program toward longer lateral wells and completions with higher sand loading. Company officials say longer lateral testing is ongoing, but sufficient data on SM's increased sand loading tests is now available from wells in Area 2 of SM's operated Eagle Ford shale position to conclude that wells completed with higher sand loadings are more productive and have improved initial condensate yields.

Cabot's Eagle Ford Production Up 76% Year Over Year

July 25, 2014 Kirk Eggleston

Cabot Oil & Gas Corp. net production in the Eagle Ford during the second quarter of 2014 was 10,308 boe/d, an increase of 76% year over year. This included 9,784 bbl of liquids per day, an increase of 83% compared to the same time frame.

During the second quarter of 2014, Cabot placed 10 wells on production that have produced for at least 30 days. These wells had an average 30-day production rate of 840 boe/d per well, with a 92% oil cut from an average lateral length of 6,729 feet. Currently, Cabot has a two-rig program in the Eagle Ford.

Cabot's Q2 Portfolio Wide Production

Across the company's portfolio, which includes ~200,000 net acres in the Marcellus Shale, equivalent production in the second quarter of 2014 was 127.6 Bcfe, consisting of 121.8 billion cubic feet (Bcf) of natural gas and 961,000 bbl of liquids.

“Our total liquids volumes increased 40 percent sequentially—with crude oil and condensate volumes increasing 44 percent—due to strong well performance from new Eagle Ford wells that were placed on production during the quarter.”

— Cabot CEO, Dan Dinges.

Cabot's Eagle Ford Position Remains the Same in Q2

In its first quarter update, Cabot indicated that it was actively pursuing additional acreage to increase its position in the play, but no acquisitions were confirmed in the company's second quarter update.

During the first quarter, Cabot secured ~4,000 additional net acres, and currently has ~66,000 net acre across the play, with properties principally located in Atascosa, Frio, La Salle and Zavala Counties, Texas. We'll keep you posted if Cabot confirms any additional Eagle Ford acreage acquisitions in the coming months.