Anadarko's Eagle Ford Resource Estimate Swells to 600 mmboe

Anadarko Petroleum increased the number of identified Eagle Ford well locations to 4,000 and increased its resource estimate to 600 million barrels of oil equivalent.  That means total resource from the company's 400,000+ gross acres will stretch to more than 1 billion boe. Anadarko is partnered with KNOC across its Eagle Ford acreage. Anadarko also reached record production in the quarter. The company averaged more than 30,200 boe/d for an entire week. Sales volumes averaged 12,000 b/d of oil, 6,000 b/d of NGLs, and 59 mmcf/d of natural gas during the quarter.

The Brasada gas processing plant is also in service as of the first quarter. The plant has current capacity of 200 mmcf/d, but will have ultimate capacity of 455 mmcf/d when construction is completed in mid-2013.

Read more at our Anadarko Petroleum Eagle Ford Shale page.

ConocoPhillips Revenue Down in Q1 - Eagle Ford Activity Up

ConocoPhillips Eagle Ford Production

ConocoPhillips (COP) is in the process of spinning off its crude oil refining business into a new company named Phillips 66. The company reported lower revenues than expected in the first quarter of 2012. I'm sure the details of the split are distracting corporate executives, but there isn't any sign of letting up in the Eagle Ford. Conoco ran an average of more than 16 rigs targeting the Eagle Ford during the first quarter of 2012. That's up two rigs from 14 during the fourth quarter of 2011.

The company is on pace to grow production to more than 60,000 boe/d in 2012 and to almost 120,000 boe/d in 2013. For those counting, that's 100% growth this year and 100% growth next year. In the Eagle Ford, the company reports industry leading performance with wells that breakeven at $37/bbl WTI. ConocoPhillip's 200,000 plus acres span the border of the black oil and condensate window in the play (Lavaca, DeWitt, Karnes, Live Oak, and McMullen counties), where the company reports the Eagle Ford will produce 77% liquids. That's good news in today's natural gas price environment.

ConocoPhillip's average well comes online at more than 700 bbls per day and will produce over 175,000 boe in the first year of its life. That puts first year revenue, for the average well, in the neighborhood of $10 million. Consider a 20% royalty burden and the company is operating wells that have around a 1-year payout.

Magnum Hunter Triples Production Year Over Year - Q1 2012 Update

Magnum Hunter Resources tripled production year over year in the first quarter and the Eagle Ford is helping drive the company's strong growth.  In the first three months of the year, the company drilled four operated wells that all came on line at more than 1,325 boe/d, with the best well testing 2,250 boe/d. All production rates were reported from one day tests.  All four wells were fracture completed with 21-25 stages in 6,100 to 6,700 ft horizontal laterals.  With the new wells most of the company's acreage in Gonzales and Lavaca counties is now held by production.

In the company's non-operated position, Hunt Oil completed four additional wells that came on line with initial production rates between 167-920 boe/d.

Sanchez Energy Commingles the Eagle Ford and Austin Chalk in

Sanchez Energy held its fourth quarter 2011 and full-year 2011 conference call on March 29, 2012. The company disclosed well results across its acreage and partial results from a vertical well that was completed in the Eagle Ford and Austin Chalk. The well is located in the company's Maverick area of Zavala and Frio counties. More operational quotes below:

Sanchez began its accelerated 2012 drilling program late in the first quarter of 2012 and currently has three rigs running, one in each of its core areas of Maverick, Palmetto and Marquis. A vertical well in Maverick, the Mark & Sandra #1 (100% W.I.), was completed and tested in March with an initial production rate of approximately 207 BOE/D. Production from the Eagle Ford was flow-tested in this well for about 30 days prior to setting a temporary bridge plug and perforating and fracking the Austin Chalk interval, which sits directly above the Eagle Ford. After testing of the Austin Chalk, Sanchez plans to drill out the temporary plug and comingle the Eagle Ford and the Austin Chalk production.

Also, in the Maverick area, the Ray #1H (100% W.I.) well was recently drilled to a total depth of approximately 12,000 feet including an approximate 6,000 foot horizontal section and cased. Completion operations will commence shortly. The rig which drilled the Ray is now drilling the Petro Pards 1H (100% W.I.), also in the Maverick area.

In its Marquis area, Sanchez added approximately 1,600 net acres to its land position bringing its core position in Fayette and Lavaca, Counties to approximately 50,000 net acres. The first well in this area, the Prost #1H (100% W.I.) is currently drilling.

In the Palmetto area, the first of 13 gross (6.5 net) wells, the Barnhart #7H (50% W.I.) is currently drilling.

Read the entire press release at sanchezenergycorp.com

EOG Eagle Ford Reserves Potential Jumps 700 mmboe to 1.6 Billion Barrels

EOG - Cheapside TX Eagle Ford Wells

EOG Resources' Eagle Ford Shale assets continue to outperform. The company announced an increase in potential recoverable reserves of 700 million barrels. That brings EOG's Eagle Ford reserve potential up to 1.6 billion barrels. The catalyst was successful testing of tighter well spacing.

U.S. proved oil reserves are just over 20 billion barrels, so a 1.6 billion barrel addition, from a single company, is significant to say the least. 

Strong Initial Production Rates at 65-Acre Spacing

EOG reported monster wells from two of its 65-acre test units.

In Gonzales County, the Henkhaus Unit #1H, #2H, #3H, #4H, #6H and #7H wells were drilled on a pattern of 65-acre spacing. The six wells were completed to sales at individual initial production rates ranging from 2,424 to 3,733 barrels of oil per day (Bopd) with 442 to 679 barrels per day (Bpd) of natural gas liquids (NGLs) and 2.2 to 3.4 million cubic feet per day (MMcfd) of natural gas per well. The Mitchell Unit #3H, #4H, #5H, #6H, #7H and #8H wells, which were also drilled as down-spaced pilots, began initial production at 2,833 to 3,527 Bopd with 275 to 485 Bpd of NGLs and 1.4 to 2.4 MMcfd of natural gas per well. The Meyer #3H, #4H, #5H, #8H and #9H wells had individual peak oil rates ranging from 1,647 to 2,813 Bopd with 199 to 413 Bpd of NGLs and 1.0 to 2.1 MMcfd of natural gas.

The results are a great sign for EOG, but a bad sign for natural gas fundamentals. If oil rigs are bringing on wells with 1-3.4 mmcfd of gas production, dropping gas rigs just got a little less important.

EOG Downspacing for Greater Oil Recovery Rates

The company originally planned for 130-acre spacing, but now believes it will develop the field at 65 to 90-acre spacing. The recovery factor in the field is now pegged at 6%. With a total of almost 28 BnBoe of oil in place and 3,200 wells left in the company's inventory, I'm guessing there will be a lot of things learned over the course of the next few years that will only increase the recovery factor.

The company has built its knowledge and understanding of the play by drilling more than 375 wells to date. EOG only trails Chesapeake in terms of drilling and has 26 rigs working the area as of February 2012.

EOG exited the year with more than 66,000 boe/d of production (78% crude oil) in the Eagle Ford.  Total crude production eclipse 50,000 b/d for the first time and, with the activity EOG has planned, it will likely be in the rearview mirror for some time to come.

A highlights include:

• 3,000 b/d IP rates
• 1.6 BnBoe of Reserves after Royalty might be the largest discovery since Prudhoe Bay in the 1960s
• 3,200 wells yet to be drilled in the Eagle Ford
• Almost 28 BnBoe of oil in place
• Targeting $5.5 million well costs with 4,000 ft laterals
• Self sourced sand and frac crews contribute a 80% ATROR

If you want to listen in on the conference call, it's at 8 am central and can be accessed through the company's website.