Ice Storm Hits the Eagle Ford

Ice Storms Hitting South Texas
Ice Storms Hitting South Texas

Frigid temperatures could have an impact on operations in the Eagle Ford as the mercury hovers below the freezing mark for most of Friday morning. The wintry mix began hitting the counties covering the Eagle Ford formation late on Thursday night.

Due to the adverse weather conditions, non-critical work may be delayed and completions could be postponed. Black ice and slippery roads will also likely impact efficiency for logistical operations across the Eagle Ford.

Although the weather may be a burden to operations in South Texas, the industry is no stranger to cold weather. Workers in the Bakken oilfield have experienced crippling conditions due to dramatically cold temperatures throughout the winter.

Freeze offs from the cold weather will likely have a larger impact further north where temperatures have dipped much further below freezing.

Weekend temperatures in South Texas will be back into the high 60's and 70's, so interruptions should be temporary

For more on the weather in South Texas this Friday, visit nowww.accuweather.com

Anadarko Increases Eagle Ford Reserves - Resource Estimate to 600 mmboe

Anadarko increased its resource estimate for its Eagle Ford Shale properties to 600 million barrels of oil equivalent (mmboe) at its analyst day. The company also reported having before tax rates of return of more than 100% at as little as $2 natural gas prices, as long as oil is $100 per bbl. The average well across the company's acreage produces 65% liquids (40% oil & 25% NGLs).

Anadarko's 2012 Drilling Plans

Anadarko plans to drill 250 wells with 10 operated rigs in 2012 and will increase to 275+ wells in 2013.  The company has also doubled the expected number of wells with 4,000 planned locations. Over the past couple of years, the company has made significant operational improvements. Rig spud to rig release has fallen from 18 to 12 days, while drilling costs have remained below $2 million per well. Anadarko can also complete an individual stage in less than 8 hours and has driven completion costs below $5 million. The average well drilled in 2012 will have a lateral length of more than 6,600 ft. That's an increase of more than 2,000 ft per well over lateral lengths in 2009.

Anadarko's Eagle Ford Type Well

A typical well in the Eagle Ford for Anadarko displays the following characteristics:

  • 450 mboe EUR
  • Almost 600 boe/d IP, with a little less than 350 boe/d at the end of year one
  • 40% Oil, 25% NGLs, 35% Natural Gas
  • $5.8 million well costs

Additional Processing Capacity Coming Online

The company will also have the Brasada Processing Plant (200 mmcf/d) online in 2013. the Brasada Plant will add more than 5,000 b/d of NGLs production in 2013. Current expectations are for net sales volumes that almost reach 50,000 boe/d by year- end 2013.

Read more at anadarko.com

Chesapeake's Operating Plan | Natural Gas Loss = Eagle Ford Gain

Chesapeake Energy is planning to reduce the company's natural gas rig count across the U.S. and shut in natural gas production in response to low prices. The operated, dry gas, rig count will decrease by 50 rigs to 24 in 2012 from 75 in 2011. The company is also shutting in production of 0.5 Bcfd. That's a little less than 1% of U.S. supply, but it's a good start in helping remedy $2 natural gas prices. The rigs will be moved to liquids-rich areas that are supported by more valuable oil, condensate, and NGL production. The Eagle Ford is a likely beneficiary. While the change shouldn't be substantial, don't discount the value of the play's liquids production in times of low gas prices. Chesapeake is likely one of many that will make similar moves.

This reallocation will result in increased expenditures in certain of Chesapeake’s liquids-rich plays, including the Eagle Ford Shale, Utica Shale, Mississippi Lime, Granite Wash, Cleveland, Tonkawa, Niobrara, Bone Spring, Avalon, Wolfcamp, and Wolfberry. The company estimates that approximately 85% of its 2012 total net operated drilling capital expenditures will be invested in its liquids-rich plays.

The Barnett Shale and the Haynesville Shale are the two plays that will be affected the most by the changes. Chesapeake will only run six rigs in the Haynesville and six in the Barnett. The company will keep 12 rigs active in the dry gas portion of the Marcellus Shale

Read the entire news release at chk.com

Talisman Energy's Adds Fracking and Completion Crews

Talisman Energy recently completed an Eagle Ford Shale Acreage Acquisition from SM Energy and now has two in house completion crews that will administer fracking operations across the play. The decision to build the Talisman led hydraulic fracturing crews delayed oil & gas operations earlier in the year, but the company should be able to ramp up activity without the inflation other operators are experiencing. Economic results have been strong and this is another sign that Talisman and the like are planning to be here for the long haul.

In the Eagle Ford, we're continuing to ramp up activity, and we'll exit with 10 rigs operating there. We now have 2 completion teams fully up and running, and they have a continuous program as we build production from the area. We were a little slower than we had hoped in getting the completion activity started this year because we wanted to use our own dedicated crews rather than utilize existing service companies at the very high spot rates earlier in the year. This will reduce our average production from the play for this year because we can't make up for the period we delayed, but the crews at least are now fully up and running.

Read the full press release at SeekingAlpha.com