Swift Energy Looks For Eagle Ford Partner as Wells Improve

Swift Energy Eagle Ford Well Expectations
Swift Energy Eagle Ford Well Expectations

Swift Energy held its annual analyst meeting the past week. It has been an exciting two years for the company as both production and reserves have grown by more than 40%. During that time, the Eagle Ford has become the company's top performing asset.

Highlights from the Eagle Ford portion of the company presentation include:

  • Initial production rates have improved 10% in oil & condensate wells
  • Estimated Ultimate Recoveries have improved in step at 10%
  • Drilling and completion costs have come down 10% or $800,000
Swift Eagle Ford Lateral Placement - Seismic
Swift Eagle Ford Lateral Placement - Seismic

Wells benefited in 2012 from more precise lateral location (in the lower Eagle Ford) and improved completion techniques. Drilling days have fallen by 22% to 8.5 days and the company is completing 7-8 stages per day compared to just 4-5 in 2011.

Successful downspacing tests at 60-80 acres in McMullen and La Salle counties have increased the company's drilling inventory by 30%.

Swift Plans For Eagle Ford JV Partner

In an effort to accelerate development of Swift Energy's Eagle Ford properties, the company plans to bring in a joint venture partner. A joint venture partner, or outside capital, will enable the company to improve project returns and accelerate value recognition. The working interest that is being offered was not disclosed, but I suspect we'll see Swift raise upwards of $100-200 million.

Carrizo Oil & Gas Plans Big Spending in the Eagle Ford

Carrizo Eagle Ford and Pearsall Map
Carrizo Eagle Ford and Pearsall Map

Carrizo Oil & Gas has allocated $385 million of its $500 million development budget to drilling & completing wells in the South Texas Eagle Ford. The company plans to keep three rigs running in the play throughout 2013.

The company will spend a total of $624 million in 2013. Spending will be allocated as follows:

  • $385 million - Eagle Ford
  • $124 million - Land, seismic, and related activities
  • $70 million - Marcellus Shale
  • $35 million - Niobrara Shale
  • $10 million - Other drilling activities

As of December 2012, Carrizo had drilled 91 horizontal wells and had brought 68 to production. To date, wells have produced a little over 500 bbls/d of oil in the first 30 days and  360 bbls/d of oil over the first 180 days. The company's oil production is also fetching a premium of almost $10 to WTI.

Also, the company has updated its latest figures related to well costs and completions referenced in the map above. Development well costs are now estimated at $6.5-7.5 million and will be completed with 20 frac stages.

Carrizo President and CEO, S. P. "Chip" Johnson, IV stated, "This 2013 plan allows us to maintain our current level of drilling activity plus the addition of a new rig working in the Niobrara Formation for the entirety of 2013. Our rig count will remain at three rigs running in the Eagle Ford Shale, one rig drilling in the Marcellus Shale and now two rigs running in the Niobrara Formation. This drilling activity supports our previously announced 2013 production forecast for approximately 28% annual growth in oil production and a natural gas production decline of approximately 3%.

Read the full press release from the company at crzo.net

Sanchez Energy Eagle Ford Reserves Hit 15 mmboe - Vertical Well Tests Coming

Sanchez Energy Eagle Ford Shale Map
Sanchez Energy Eagle Ford Shale Map

Sanchez Energy's Eagle Ford reserves have grown by 125% since the end of 2011. The company reported 15 million barrels of proved reserves with 87% being attributable to oil. An internal estimate pegs total resource potential at more than 250 mmboe from 800-1,200 wells.

Sanchez has approximately 95,000 acres stretched across portions of the black oil and volatile oil windows of the Eagle Ford. The company's prize asset is its 9,400 acres in the Palmetto area of Gonzales County. Sanchez has two rigs running in the Eagle Ford and plans for an additional rig in the Palmetto area in August. The company just completed a seismic study in the Palmetto area and has started a development program that will include 8-9 gross wells in the second half of 2012.

Current Eagle Ford production is 1,200 boe/d, with guidance is for 4,000-5,000 boe/d by the end of 2012. In addition to the Palmetto area, watch for vertical well results from the company's Maverick Area in Zavala and Frio counties. A vertical well test performed similarly to horizontal wells (264 boe/d IP) in the area and the company plans to test an additional 3-4 vertical wells. There's a possibility vertical wells will provide competitive initial production rates at much lower wells costs.

Find additional detail on individual well results at sanchezenergycorp.com