Baytex Breaks-Even at $30 a Barrel in the Eagle Ford

May 8, 2017 Elizabeth Alford

Baytex Energy announced strong first quarter results for its Eagle Ford assets, including increased performance and a break-even point at $30 per barrel of WTI.

For 2017, Baytex Energy is focusing ~ 70% of its budgeted E&D spending on the Eagle Ford Shale Play. The Calgary-based company reports they expect the development window in the region is in excess of 10 years at the current pace.

First Quarter 2017: Eagle Ford

Throughout the quarter, Baytex saw strong growth and reduced costs for its Eagle Ford assets. Quarterly highlights include:

Production increased 8% to 36,000 barrels of oil equivalent per day
Increased pace of development to five drilling rigs and two completion crews
Integrated the Peace River acquisition which closed on January 20, 2017
Participated in the drilling of 36 (8.4 net) wells and commenced production from 33 (9.4 net) wells
Break even price in the region is at $30 a barrel
Record low well costs of approximatelyUS$4.5 million, down 20% from Q1/2016.

“Our pace of development in the Eagle Ford is expected to remain stable throughout 2017 with 4-5 drilling rigs and 2 completion crews working on our lands. At this pace, we expect to bring approximately 34 net wells on production in 2017. ”

— Baytex Energy Press Release

Improved Performance and Efficiency

The following chart shows Baytex' increased performance and efficiency over the years. Improvements in drilling and completion design have increased 30-day IP rates by approximately 105% since Q4/2011 with 180-day cumulative recovery increasing 63% over the same time period. Drilling times have decreased by 63% since Q4/2011 resulting in reduced completed well costs.

Eagle Ford Shale Rig Count Trying to Break 100

May 6, 2017 Elizabeth Alford

The Eagle Ford Shale rig count was unchanged this week, with data showing 99 rigs running across our coverage area by midday Friday.

In recent Eagle Ford News, Cabot Oil and Gas reports strong results from their Eagle Ford assets during the first quarter of the year, boasting good returns and reduced costs.

A total of 877 oil and gas rigs were running across the United States this week, an increase of seven over than last week. 173 rigs targeted natural gas (two more than the previous week) and 703 were targeting oil in the U.S. (six more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 443 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Eight rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $3.27/mmbtu.

91 Eagle Ford rigs were targeting oil with WTI oil prices dipping to $46.22

A total of 94 rigs are drilling horizontal wells, two are drilling directional wells and three are vertical.

Karnes County leads this week with 23 rigs in production. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Rig Count by County-May 5, 2017

Eagle Ford Shale News

Cabot Getting Good Returns in the Eagle Ford

NuStar Sees Positive Turn in Eagle Ford

Sitton: Every Day is Earth Day

Venado Building Strong Eagle Ford Business

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

The Eagle Ford Shale drilling rig count has had its ups and downs, marking the rise of the region's shale development and the decline brought on by low crude prices. The following infographic shows the rig count trends since 2011.Eagle Ford Rig Count

Natural Gas Production Plummets in Eagle Ford Shale County

May 3, 2017 Elizabeth Alford

Webb County was edged out as the leading Texas producer of natural gas when production plunged in February.

Webb County has ruled the state for years in natural gas production, boasting the highest numbers compared to other Texas counties by the Texas Railroad Commission (RRC)

In February that all changed, with the RRC reporting the county had a steep drop in production and Tarrant County moved into the top spot.

Webb county started the year strong averaging 60, 760, 884 mmcf of natural gas in January. Production for the Eagle Ford county dropped by more than 40% in February, with the county averaging 35,705, 945 mmcf. Tarrant County pulled ahead with 37,096,698 mmcf.

In 2016, the Eagle Ford Shale led Texas in natural gas production, according to the RRC. For full year 2016, the state's regulatory agency reported total gas production at 7,969,918,341 (mcf). This figure is broken down by region to include:

Eagle Ford Shale: 5357 (MMcf)
Permian Basin: 5193 (MMcf)
Barnett Shale: 3775 (MMcf)
Haynesville : 887 (MMcf)

Texas oil production in February slipped in most counties, but Eagle-Ford's Karnes County is gaining ground. Production increased in Karnes from 5,603,618 bbls in January to 5,677,096 in February.

Cabot Getting Good Returns in the Eagle Ford

May 2, 2017 Elizabeth Alford

Cabot Oil and Gas reports strong results from their Eagle Ford assets during the first quarter of the year, boasting good returns and reduced costs.

Cabot released first quarter results this week showing a positive reversal since last year. The company reported a net income of $106 million for the first quarter of 2017 compared to a loss of $51 million during 2016 Q1.

2017 First Quarter Highlights

$106 million net income
7% increase in daily production
11% decrease in operating expense per unit

Eagle Ford Operations

Cabot's net production in the Eagle Ford Shale during the first quarter of 2017 was 12,059 barrels of oil equivalent (Boe) per day, an increase of 15 percent form the last quarter. The company raised its 2017 E&P capital budget to $845 million and plans to spend $200 mm for development activities in the Eagle Ford Shale.

Other highlights include:

7 net wells drilled and completed
10 net wells placed on production
Drilling costs were 13 percent lower, compared to the full-year 2016 average
Currently operating one rig
Utilizing one completion crew

“Our Eagle Ford has improved (...), our efficiency, our cost of business, cost of operations, the return that we are able to deliver and the strip pricing that we have out there right now. We’re getting good returns in our Eagle Ford operation. ”

— Dan O. Dinges, President and CEO

NuStar Sees Positive Turn in Eagle Ford

April 27, 2017 Elizabeth Alford

NuStar Energy announces strong first quarter results despite low crude volumes from the Eagle Ford.

Related: Eagle Ford Rig Count Breaks 90

For the first quarter of 2017, NuStar experienced improved results and a decrease in overall operating expenses. Quarterly income was $38.5 million, with EBITDA at $154.1 million.

The company experienced low volumes form their Eagle Ford assets during the quarter but say the recent increase in drilling activity are cause for optimistic.

San Antonio-based, NuStar recently announced a $1.475 billion acquisition of the Navigator system, a fully integrated crude platform with over 500 miles of pipeline and 412,000 barrels per day of capacity in the Midland basin. In a quarterly earnings call, company executives affirmed they are looking for opportunities to connect the Navigator system with its Eagle Ford assets.

“We’ve had some favorable acquisitions in the Eagle Ford specifically with Sanchez buying into some acreage down there. So they’re more active than Anadarko was. So we’re starting to see things like that make a positive turn in the Eagle Ford.”

— Bradley Barron, CEO

Navigator owns and operates crude oil transportation, pipeline gathering and storage assets located in the Midland Basin, including:

500 miles of crude oil transportation pipelines with approximately 74,000 barrels per day, ship-or-pay volume commitments and deliverability of approximately 412,000 barrels per day through multiple outbound interconnects;
A pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity covering over 500,000 dedicated acres;
Approximately 1 million barrels of crude oil storage capacity with 440,000 barrels leased to third parties

The Eagle Ford Shale rig count is continuing its climb, with our data showing 93 rigs running across our coverage area last week.