ConocoPhillips Eagle Ford Production Up 58% to 141,000 boe/d in Q4 2013

February 5, 2014 Kirk Eggleston

ConocoPhillips' Eagle Ford Shale production was 141,000 boe/d in the fourth-quarter of 2013, surpassing fourth quarter 2012 production from the formation by 58%. The Lower 48 and Latin America accounted for ~28% of the company's total production.

ConocoPhillips Close to Hitting Projected Growth Targets in the Eagle Ford

In the fourth quarter of 2012, Conoco's Eagle Ford production averaged 70,000 boe/d, but grew rapidly in Q4 2012 to 100,000 boe/d. In December of 2013, Conoco announced a five year plan to invest $8 billion in the Eagle Ford and grow production to almost 150,000 boe/d by 2017.

Conoco will likely reach its goal of 150,000 boe/d from the Eagle Ford sometime in 2014 or almost three years earlier than planned.

ConocoPhillips Capital Budget in Unconventional Drilling

In 2014, Conoco will spend ~$9 billion on its North American operations. Approximately $4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale. In 2013, Conoco's production in the Eagle Ford, Bakken and Permian grew 31% from ~167,000 boe/d in the fourth-quarter of 2012 to ~218,000 boe/d in 2013.

Eagle Ford Contribution to Conoco's Reserves

The growth in unconventional drilling has contributed greatly to Conoco's reserves.

“2013 was a significant year for the company and we achieved several important, strategic milestones... [the company] achieved conventional and unconventional exploration success... [and] our capital program yielded strong organic reserve replacement.”

— CEO Ryan Lance

In 2013, Conoco added 470 million boe in Lower 48, primarily in liquids-rich shale plays, including the Eagle Ford and Bakken.

ConocoPhillips Production in 2013 and Plans Moving Forward at a Glance

ConocoPhillips Eagle Ford Shale Q4 production up ~58% from 2012 to 141,000 boe/d
~ 28% of ConocoPhillips Lower 48 Production is in Bakken
$4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale in 2014
470 million boe in Lower 48 reserves added in 2013, primarily in liquids-rich shale plays, including the Eagle Ford and Bakken
31% production growth in Bakken, Eagle Ford and Permian to ~218,000 boe/d in Q4 2013

Carrizo Oil & Gas Plans Big Spending in the Eagle Ford

January 16, 2013 R.T. Dukes

Carrizo Eagle Ford and Pearsall Shale 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

Apollo Buys El Paso's E&P Unit Before Kinder Morgan Closes on the Pipeline Segment

February 27, 2012 R.T. Dukes

Apollo and El Paso reached a $7.15 billion agreement for El Paso's E&P segment. The deal is subject to the closing of the El Paso-Kinder Morgan pipeline merger.

El Paso's exploration and production segment has been on the sales block since the Kinder Morgan deal was announced, but the question remained whether the assets would be sold in pieces or all together.

While Apollo has been rumored to be considering the deal, it comes as a bit of a surprise that the private equity group acquire El Paso E&P. Most industry experts thought El Paso would be a great fit for an international company looking to expand its footprint in the U.S. (e.g. Statoil-Brigham). Low natural gas prices that are limiting many companies' upstream budgets might have opened a window for the Apollo group to step in.

Apollo Global Management is leading a group that includes Riverstone Holdings, Access Industries, as well as others in buying the E&P unit. The deal will have almost no tax consequences for Kinder Morgan and the company will use the proceeds to pay down debt taken on to finance the purchase El Paso Corp.

El Paso's assets are attractive even at low natural gas prices because the company has significant oil/liquids producing acreage positions in the Uinta Basin in Utah, the Niobrara in the Rockies, the Wolfcamp in West Texas, and the Eagle Ford Shale of La Salle and Dimmit counties.

Apollo will likely increase the pace of development in the oil & gas areas of the company's portfolio. Private equity firms do not practice a long-term buy and hold strategy. El Paso will be held for a period and later re-offered to the market. Typically, private equity firms hold investments for a 3-7 year period and target a return of 2-3 times their investment.

Carrizo Oil & Gas Eagle Ford Reserves Up 90% - 2011

February 22, 2012 R.T. Dukes

Carrizo Oil & Gas announced year-end results along with updates from the company's development in oil plays. Eagle Ford Shale reserves increased 90% year over year from 15 mmboe to 28.5 mmboe.

Carrizo's 41,000 acres is primarily located in the gas condensate window, of La Salle and McMullen counties, where expectations are for a production stream of 75% liquids and 25% rich gas. Oil in the area is selling at an average of $4 better than NYMEX prices, so even with infrastructure constraints we're seeing the benefits of proximity to the Gulf Coast refining complex.

The company's first 26 wells have come online with initial production rates ranging from 600 to 1,000 bopd. 20 gross (15.5 net) wells were brought to production in 2011. The company still has a backlog of almost 10 wells waiting to be brought to production. While a very positive operations update, there were delays with coiled tubing services and mechanical problems requiring attention before wells were completed.

Production from the fourth quarter of 2011 was negatively impacted by delays in bringing multi-well drilling pads on production in the Eagle Ford. These delays were associated with availability of coiled-tubing drilling services and mechanical issues affecting ancillary well site equipment. The conditions causing these delays have been resolved and performance of our new wells in both the Eagle Ford and Niobrara continue to meet or exceed our expectations.

Carrizo has 4 rigs active now and will operate 3 net rigs throughout 2012 spending approximately $320 million of the company's $440 million capital budget in the Eagle Ford Shale. That's a quick shift for the historically gas focused company.

Capital budget allocations for 2012

$320 million - Eagle Ford Shale
$62 million - Marcellus Shale
$43 million - Niobrara Formation
$15 million - Barnett Shale

The company's liquids/oil operations are focused in the Eagle Ford and Niobrara Shale of Colorado. The company will spend approximately 10% of its capital budget in the Niobrara this year, while $77 million will be spent in natural gas plays.

Read the entire press release at crzo.net

Anadarko's Eagle Ford Assets Added 50,000 boe/d in 2011

February 8, 2012 R.T. Dukes

Anadarko operated an average of 10 rigs in 2011, while growing gross production from 27,000 barrels equivalent per day to 77,000 barrels equivalent per day year over year. Production was comprised of 50,000 bbls/d of liquids and over 160 mmcfd of gas. The company grew company wide liquids production by 10% in 2011 and expects comparable growth rates going forward. Liquids growth was primarily driven by the Bone Spring, Eagle Ford Shale, Greater Natural Buttes area, and the Wattenberg field.

Horizontal liquids plays have become the focus of what is a diverse natural gas portfolio. Anadarko was well positioned to transition activity to liquids plays as natural gas prices fell. The Eagle Ford and Wattenberg will be important development areas for many years to come.

Highlights from the quarterly call included:

Delivered record sales volumes of 248 million BOE (barrels of oil equivalent), driven by a 10-percent year-over-year increase in liquids
Added 392 million BOE of proved reserves, replacing 159 percent of production
Achieved 80-percent success rate in offshore exploration and appraisal drilling programs
Established net resource potential of 500 million to 1.5 billion BOE in the Horizontal Wattenberg
More than tripled the original recoverable resource estimate offshore Mozambique to 15 to 30-plus trillion cubic feet (Tcf)

Read more at our Anadarko Eagle Ford Shale page.