Carrizo Oil & Gas Eagle Ford Reserves Up 90% - 2011

Carrizo Eagle Ford Shale Map
Carrizo Eagle Ford Shale Map

Carrizo Oil & Gas announced year-end results along with updates from the company's development in oil plays.  Eagle Ford Shale reserves increased 90% year over year from 15 mmboe to 28.5 mmboe.

Carrizo's 41,000 acres is primarily located in the gas condensate window, of La Salle and McMullen counties, where expectations are for a production stream of 75% liquids and 25% rich gas. Oil in the area is selling at an average of $4 better than NYMEX prices, so even with infrastructure constraints we're seeing the benefits of proximity to the Gulf Coast refining complex.

The company's first 26 wells have come online with initial production rates ranging from 600 to 1,000 bopd. 20 gross (15.5 net) wells were brought to production in 2011. The company still has a backlog of almost 10 wells waiting to be brought to production. While  a very positive operations update, there were delays with coiled tubing services and mechanical problems requiring attention before wells were completed.

Production from the fourth quarter of 2011 was negatively impacted by delays in bringing multi-well drilling pads on production in the Eagle Ford. These delays were associated with availability of coiled-tubing drilling services and mechanical issues affecting ancillary well site equipment. The conditions causing these delays have been resolved and performance of our new wells in both the Eagle Ford and Niobrara continue to meet or exceed our expectations.

Carrizo has 4 rigs active now and will operate 3 net rigs throughout 2012 spending approximately $320 million of the company's $440 million capital budget in the Eagle Ford Shale. That's a quick shift for the historically gas focused company.

Capital budget allocations for 2012

  • $320 million - Eagle Ford Shale
  • $62 million - Marcellus Shale
  • $43 million - Niobrara Formation
  • $15 million - Barnett Shale

The company's liquids/oil operations are focused in the Eagle Ford and Niobrara Shale of Colorado. The company will spend approximately 10% of its capital budget in the Niobrara this year, while $77 million will be spent in natural gas plays.

Read the entire press release at crzo.net

Escondido Resources Horizontal Eagle Ford Drilling Results - 2011

Escondido Resources II announced well results from the company's 2011 drilling program in South Texas.  Escondido drilled 17 wells in 2011 with an average IP rate of 7 mmcfd. That is not just Eagle Ford wells. The company has drilled a total of 29 wells since 2009, with 18 in the Escondido formation, 7 targeting the Olmos, and 5 targeting the Eagle Ford Shale. All 17 wells in 2011 were horizontal.  The company primarily operates in Northern Webb County targeting the Escondido and Olmos formations, but also operates acreage in La Salle and McMullen counties.  The company owns the deeper Eagle Ford rights on over half its 60,000 net acres in the area.

The jewel of the Eagle Ford wells came online at 10 mmcfd of wet gas in late 2011 and another well that had good log shows is set to be completed in March.

Read the full press release at escondido-resources.com

Cheniere Energy's Corpus Christi Liquefaction (LNG) to Hold Open House

Cheniere Energy's subsidiary, Corpus Christi Liquefaction, plans to hold an open house in Portland, TX to discuss the proposed LNG facility that would export Eagle Ford natural gas.  The event is scheduled for February 28th, and you can get the full details at our Eagle Ford Shale Events page.   This will be the perfect chance to ask questions about the number of jobs the project might create, exactly how much of the channel it will affect, and general questions about the scope of the project. It will also be important that this facility has access to adequate supply for a very long time, so it will be very interesting to hear what FERC and Cheniere expect from the Eagle Ford.

Read more about the project at cheniere.com

Hydraulic Fracturing Does Not Contaminate Drinking Water

Hydraulic fracturing, fracking, or frac'ing, depending on who you talk to, DOES NOT contaminate drinking water.  That was the conclusion from a University of Texas Energy Institute study of the process. The study noted that contamination is usually related to above ground spills or a mishandling of wastewater.

Noteably, the study was not funded by industry dollars.

 

Eagle Ford Rig Count Up 1 Again This Week - Feb 17, 2012

Drilling Rig
Drilling Rig 7

The Eagle Ford Shale drilling rig count grew by 1 rig again this week. Activity across the play is resisting sub-$3 natural gas prices and it looks like we'll find out if operator's capital budgets can resist low gas prices as well. EOG Resources increased its reserves estimate to 1.6 Billion barrels and I don't believe they will be slowing down any time soon.  It will be interesting to see what happens for the guys producing more natural gas and not benefiting from oil prices across their portfolio. La Salle County dropped two rigs, so we have no counties with more than 40 rigs working. The natural gas rig count was up 2 this week to 81.  The entire increase was attributable to Karnes and DeWitt counties where gas wells produce considerable amounts of liquids. The oil rig count fell 1 to 175.  Natural gas and oil prices were both up a bit on the week. Gas prices were trading at ~$2.70/mmbtu on Friday and the March WTI oil contract increased to more than $103 per bbl. Horizontal wells account for activity from 237 rigs and we have 1 disposal well being drilling in Leon County (not a core Eagle Ford area).

La Salle County's lead in drilling shrunk to 1 with 38 rigs working. Karnes (37),Webb (34), DeWitt (25), McMullen (23),Gonzales (22), Dimmit (16), and Live Oak (10) make up the top Eagle Ford targeted counties.

It was another busy week for news on the pipeline and midstream side, but EOG's addition of 700 million barrels in potential reserves in the Eagle Ford trumped all other announcements.

News

Operator News

For everyone out there considering all the driving jobs that are paying north of $30 an hour, Devorah Fox of Mike Byrnes & Associates, Inc. contributed an article related to getting a CDL license.

Come back weekly for updates on the South Texas drilling rig count.

Drilling Rig Count by Operator

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 SmithBits 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 and/or Smith Service Co's (Schlumberger) Smith Rig Count.

Drilling Rigs by County