Goodrich Petroleum Buda Lime Well Results Impress

In Goodrich Petroleum's operations update from the second quarter, the company announced impressive well results from a horizontal Buda Lime well. The well came on at almost 1,400 barrels of oil per day and 1.5 mmcfd. The well averaged 1,000 barrels of oil equivalent per day over the first 30 days. At $75 oil that $2.25 million in first month. Subtract royalties and operating costs and your looking at a pretty quick payout. Possibly, 3-4 months. That's a good well!  

The Company has completed its third Buda Lime well, the Carnes 6H (67% WI) well, an unstimulated 3,100 foot lateral, at a 24-hour initial production rate of 1,635 BOE per day, comprised of 1,380 barrels of oil and 1,535 Mcf per day. The well averaged 1,000 BOE per day over the first thirty days, and had an estimated completed well cost of less than $3.0 million.

The Company has two rigs running full time drilling Eagle Ford Shale and Buda Limewells. For the remainder of 2011, the Company currently anticipates drilling 5 gross (3.5 net) Eagle Ford Shale wells on the southern half and 8 gross (5.5 net) Buda Limewells on the northern half of the Company's approximate 40,000 net acre block.

Read the press release at GoodrichPetroleum.com

San Antonio Businesses Have Eagle Ford Optimism

Eagle Ford Shale jobs have posted major gains over the past year and optimism in the economy is spreading throughout San Antonio. Even with the obstacles the U.S. faces as a country, South Texas is poised for growth.  Only one in nine businesses in a recent survey expects business to slow in the coming year and only one expects the economy to stay flat. The rest are expecting higher demand for products and services. An interesting note from the story is that the one company that expects the economy to stay flat hired 13 employees in the past year! If that is a sign of things to come, South Texas might benefit from the Eagle Ford Shale Oil boom for many years to come.

The association's 2011 Mid-Year Economic Report found that 58 percent expect the economy to remain flat in the coming year, and 30 percent — more than twice the number counted in a similar survey last December — felt it would fall back into recession.

Texas' and San Antonio's economies have outperformed the nation's during the recession, however, and area business owners have been quick to acknowledge their good fortunes.

Only one of the nine businesses asked to assess their prospects in the coming year was pessimistic, and a second one, Metropolitan Contracting Co., said the coming year should be stable.

But Tim Swan, CEO of Metropolitan, said that's not bad news because his business picked up last October, enough for the contractor to add about 13 employees this year.

 

Gastar Exploration Eagle Ford - Woodbine Wells Disappoint

Gastar's Robertson and Leon county properties have been watched closely to see if the Eagle Ford - Woodbine would become a commercial play named the "Eaglebine". As of the end of the second quarter, well results were not promising, so we'll have to take a wait and see approach. The company encountered mechanical problems drilling the well and wasn't able to get an effective completion in the Eaglebine. Gastar hopes that monitoring existing wells will provide the data needed to make go forward decisions. The company seems confident more effective completions can be deployed and stated they will be watching activity around their property before drilling again.

During the second quarter of 2011, we continued to monitor the four wells previously drilled to test the productivity of the Glen Rose and Eagle Ford/Woodbine (Eaglebine) formations on our East Texas acreage.   Production rates for these wells have been lower than expected, but we believe that the drilling and completion methods that we have used so far have not been optimal.

Due to drilling issues with our Wildman 7H horizontal well, we do not believe that we have adequately tested the horizontal drilling potential of the Eaglebine formation.  For the balance of 2011, we are postponing further drilling tests on these formations and will instead continue monitoring the four wells, analyzing a core sample taken from the Eaglebine section of a nearby well and observing offset operator drilling activity in the zones.

Read the full press release at Gastar.com

Pioneer Natural Resources Using White Sand in Completions

Pioneer's Eagle Ford Shale completion costs are lowered by as much $700,000 when the company uses white sand instead of ceramic proppant. That's an almost 10% savings on wells that costs $7-8 million. The company is testing white sand on 30% of its wells in 2011 and 2012. It will take some time to truly determine is white sand can hold up under the pressure of the Eagle Ford Shale. Pioneer also lowered its drilled but uncompleted well inventory during the second quarter. The company went from 23 wells to just 11 as central gas processing facilities were brought online.

Okay, turning to Eagle Ford Shale, that's Slide 14. The Eagle Ford shale assets are hitting their stride. As planned, we're running 12 rigs. The average lateral length of the wells is now up to about 5,500 feet. The economics are quite outstanding as we've always discussed, owing to the rich condensate and generally liquid-rich nature of these wells. We're seeing very good performance in Dewitt County, offsetting Black Hawk. One thing we're doing, as we discussed in the last call, is to push the envelope with regard to the use of white sand as a proppant. We have already stimulated 10 wells, and the performance of the wells looked very good and very similar to the direct offset wells where we used ceramics for the proppant. So the idea this year is about 30% of our wells this year, we'll be using white sand, and that's the number also planned for next year, 2012, about 30% of the wells.

And importantly, that reduces the cost of the wells, something like $700,000 per well, which is very significant, if you look at the future drilling campaign. Infrastructure build-out continues. We now have 6 of our central gas processing facilities completed. A seventh will be completed by the end of this quarter and eight in the next quarter. So we are really ahead of the game when it comes to build-out of infrastructure.

And the result as you see on Slide 15 is the ability to put more wells on production. We've met our goal in the second quarter of putting wells on production in the Eagle Ford. We put 18 wells on production. That's reflecting the frac bank being significantly reduced as well. The frac banks starting the second quarter was 22 or 23 wells, now it is 11 at the end of the second quarter, which is basically our minimum run rate, which is one -- basically one well per rig. But you can see, as we bring the 2 new CGPs online this quarter, we have a substantial ability to add a lot more wells to production. And in addition to that, we'll see a similar ability to do that as we get into the fourth quarter. So this area is going to be ramping up dramatically as shown on Slide 16, with the crude oil production well count increasing, third quarter should see a significant increase as shown on the slide, up to 14,000 to 17,000 BOE per day.

You can see we're going to 14 rigs next year. Those 14 rigs are all under contract. And then 16 rigs and 19 rigs looking forward.

Read the full press release at SeekingAlpha.com

Eagle Ford Well Results Consistent Across EOG's Acreage

EOG Resouces is finding well results are "similar" across its entire acreage position that stretches from Lavaca County all the way down to La Salle County. That's promising for mineral owners and other industry participants alike.  EOG now has 22 rigs drilling in play and that's up from 10 at the beginning of the year. The company also has acreage in Webb County, but is directing drilling to its liquids rich acreage.

"We are finding that well results across our 535,000 net acre position in the Eagle Ford oil window are remarkably similar. The wealth of drilling, completion and production data at our fingertips is reflected in the steadily rising momentum of our operations and success in achieving more predictable results," Papa said.