Earthstone Resumes Eagle Ford Development

May 24, 2017 Elizabeth Alford

Earthstone Energy, Inc. has resumed its Eagle Ford development program and announces plans for rest of the year.

Earthstone Energy recently announced its first quarter results, including an average daily production of approximately approximately 9,515 Boepd (66% oil, 81% liquids). Capital expenditures for the quarter totaled approximately $4.2 million.

The Woodlands-based company also reported it resumed its Eagle Ford development program in March. Plans for the rest of 2017 include drilling and completing 11 gross / 4.8 net wells in Gonzales County in 2017 at an estimated total net cost of $23.0 million.

In a quarterly earnings call, Earthstone executives spoke primarily about their newly acquired assets in the Midland Basin, where the company has 27,000 net acres and is running one rig.

“Going forward, we continue to focus on our cost structure as we execute our development program and will actively evaluate acquisition opportunities to further expand our operated acreage and production. As many of you know we tend to operate the vast majority of our assets and that is our clear focus while generating attractive economics.”

— Frank Lodzinski, President and CEO

Lonestar Resources Q1: Strong Production Growth

May 22, 2017 Elizabeth Alford

Lonestar Resources credit its Eagle Ford well completions for a strong production growth for the first quarter.

During a quarterly earnings call last week, Lonestar executives reported a 15% production growth during the three months ending March 31, 2017. The company also reduced Lease Operating and Gas Gathering Costs ("LOE") by 15% during the quarter, compared to $3.5 million over Q4 2016. Executives expect production to grow at an accelerated rate through the rest of 2017.

“2017 is off to a strong start, as Lonestar has resumed production growth in the Eagle Ford Shale play with a 15% increase in production over 4Q16 results. Our well results are validation of our highly technical approach to the Eagle Ford. I believe that we are on-track to accelerate production growth in the second half of the year, which should achieve improved liquidity and an expanded borrowing base heading into 2018.”

— Lonestar's Chief Executive Officer, Frank D. Bracken, III,

Q1 Highlights

Net oil and gas production averaged 5,266 Boe/d
Production volumes consisted of 3,250 barrels of oil per day (62%), 927 barrels of NGLs per day (17%), and 6,528 Mcf of natural gas per day
Lonestar plans to drill 12 net wells during 2017
Lease Operating Expense was reduced from $3.5 million in 4Q16 to $3.0 million in 1Q17
General & Administrative Expense was reduced from $2.8 million in 4Q16 to $2.5 million in 1Q17

Eagle Ford Rig Count Pushes to 101

May 19, 2017 Elizabeth Alford

The Eagle Ford Shale rig count continues its climb, with 101 rigs running across our coverage area by midday Friday.

In recent Eagle Ford News: after two years of struggle and industry contraction, the outlook in Texas' Eagle Ford Shale is looking more positive.

A total of 901 oil and gas rigs were running across the United States this week, an increase of 16 over last week. 180 rigs targeted natural gas (eight more than the previous week) and 720 were targeting oil in the U.S. (eight more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 459 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 $3.26/mmbtu.

95 Eagle Ford rigs were targeting oil with WTI oil prices at $50.32

A total of 95 rigs are drilling horizontal wells, two are drilling directional wells and four are vertical.

Karnes County leads this week with 24 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 19, 2017 — Eagle Ford Rig Count by County-May 19, 2017

Eagle Ford Shale News

WildHorse Gains Eagle Ford Acreage

Eagle Ford Shale Gaining Strength through 2017

Carrizo Invests Heavily in the Eagle Ford Shale Play

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

Cabot Getting Good Returns in the Eagle Ford

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.

WildHorse Gains Eagle Ford Acreage

May 18, 2017 Elizabeth Alford

WildHorse Resource Development Corp. has announced they will purchase 111,000 acres in the Eagle Ford Shale region of south Texas.

Related: Wildhorse Goes Public

Houston-based WildHorse, has entered into a $625 million deal to expand its holdings in the Eagle Ford.

The company will purchase 111,000 net acres from Anadarko Petroleum and affiliates of private equity firm Kohlberg Kravis Roberts & Co.. The assets are located in Burleson, Brazos, Lee, Milam, Robertson and Washington counties and had a fourth quarter production of 7,583 boepd from 386 operated wells.

“This transformative acquisition presented us with a strategic opportunity to consolidate our acreage position. With a total of 385,000 net acres [1,558 square km], we have built a premier contiguous acreage base, making us the second largest operator in the entire Eagle Ford trend.”

— Jay Graham., Chairman and CEO

WildHorse Resource Development Corp. is one of the newest public companies serving the region, having launched its initial public offering for $664 million in December, 2016.

The transaction is expected to close on or around June 30, 2017 with an effective date of January 1, 2017.

First Quarter 2017

Wildhorse reported an 'exciting' first quarter that included an increased average daily production by 18% to 17.6 MBoe/d for compared to 14.9 MBoe/d for the first quarter 2016. Other highlights include:

Increased Net Income to $20.3 million compared to a Net Loss of $14.2 million for the first quarter 2016
Raised estimated full-year 2017 production guidance range to 27.0 – 31.0 MBoe/d from 23.0 – 27.0 MBoe/d
Gathering, processing and transportation expense was $1.7 million, versus $1.9 million in the first quarter 2016.
Brought online its first Burleson North well and one of the strongest wells to date in the East Texas Eagle Ford and the Altimore #1H

Eagle Ford Shale Gaining Strength through 2017

May 15, 2017 Elizabeth Alford

After two years of struggle and industry contraction, the outlook in Texas' Eagle Ford Shale is looking more positive.

1) Oil and Gas Rig Count

As oil prices have rebounded, Eagle Ford producers found they could make a profit again and we are seeing more rigs dotting the landscape.

This time last year, the monthly rig count was consistently falling, but during the first quarter of 2017 that downward trend has reversed. Operators in the Eagle Ford Shale region are currently running 99 oil and gas rigs compared to 34 in May 2016.

2) Production Increases

During the first quarter of 2017, the Texas Railroad Commission (RRC) reported a spike in the number of drilling permits issued. The agency granted 3257 new drilling permits, more than double the number of this time last year.

This goes hand in hand with an increase in production. The Energy Information Administration (EIA) predicts that total America shale oil production will grow to about 438,712 barrels per day year-to-date through May 2017. The agency also estimates that the Eagle Ford shale will have added 78,468 barrels of oil per day from February 2017 to its May 2017 oil production estimate.

3) Reduced Costs

Throughout the downturn, producers have worked hard to manage and reduce operating costs and improve efficiencies as a strategy to survive. These have proven to be a key factor in the Eagle Ford come-back. For the first quarter of 2017, many companies credit lower costs to strong results.

Cabot Oil and Gas reported 13% drop in drilling costs for Eagle Ford in Q1
NuStar credited lower costs with strong first quarter results
Encana has reduced transportation and operating costs by $100 million and claims some of the lowest drilling costs in the industry
Carrizo lowered the estimate for a type curve well in the Eagle Ford by $100,000

Some analysts predict this positive trend to continue in the Eagle Ford throughout 2017.

“The Eagle Ford shale basin is experiencing a resurgence and oil production growth adding to global supply challenges, we believe that operational efficiencies gained over the past several years will enable producers to operate in an environment of oil prices in the high $40s to low $50s. ”

— SeekingAlpha.com