Carrizo - Atlas Deal Provides Cash for the Eagle Ford

Carrizo Oil and Gas has agreed to sell a portion of its Barnett Shale assets to Atlas Energy for $190 million. The deal provides capital that Carrizo will use to execute its liquids  growth strategy, which is primarily focused in the Eagle Ford.

The Company intends to use the net proceeds from this sale to repay borrowings under its revolving credit facility and use the excess proceeds to partially fund its 2012 capital expenditures plan, largely in the Eagle Ford play.

This deal is probably not the last deal you'll see this year in which operators shift resources from dry-gas to wet plays like the Eagle Ford

Read the full press release at crzo.net

Eagle Ford Regional Rig Count Forges Ahead - 275 Rigs - March 16, 2012

Oil Drilling Rig
Oil Drilling Rig

The Eagle Ford Shale drilling rig count jumped 2 rigs to 275 active in the region. That's a record for the third week in a row. It's still very early in the year, but we're getting close to the possibility of crossing 300 active rigs in the area some time in 2012. The two major constraints will be gas price and whether companies can hire and move qualified personnel into the region.

Eagle Ford Oil & Gas Rigs

The natural gas rig count halted its decline to add 1 rig to reach 73 running this past week. While 73 rigs is significant, don't forget many of those rigs are supported by condensate production and rich gas streams. The shift to more liquids prone areas of the play isn't going to change until we get a change in natural gas prices. Oil directed activity remained flat at 201 active rigs. For the second week in a row, we've had more than 200 oil rigs drilling in the area.

Natural gas prices traded around 10-year lows, with continued news that weather will be mild across the country. Gas traded below $2.30/mmbtu several times during the week. Oil prices did rally to almost $108 per barrel (WTI), but with gasoline prices approaching records, we have to wonder when there will be a reaction on the demand side that drives prices lower. We're already hearing the mention of "stay-cations". It's expensive to travel with $4 gasoline.

Horizontal wells account for activity from 257 rigs and we have 1 injection well being drilled in La Salle County. Karnes County leads development with 40 rigs. La Salle (39), Webb (31), Gonzales (27), DeWitt (27), McMullen (27), Dimmit (17), Atascosa (10), and Live Oak (10) make up the top Eagle Ford counties.

News from the week included:

If you're traveling to San Antonio soon, be sure to visit our Eagle Ford Hotels page. We've negotiated discounted rates with hotels that are welcoming the Oil & Gas Industry.

Come back weekly for updates each week or sign up for alerts.

Drilling Rig Count by Operator

hat 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

GE - Howard Energy Deal Sets Up Acquisition of Meritage Midstream Services

GE Financial Services has acquired a 30.6% stake in South Texas midstream operator Howard Energy Partners. The amount paid was not disclosed, but we do know what the company is doing with the proceeds. Howard Energy will use the money to partially fund the acquisition of Meritage Midstream Services.  Howard Energy owns more than 280 miles of natural gas pipelines in South Texas.  Meritage Midstream owns 185 miles of pipe, including the Eagle Ford's Escondido Gathering System and the Cuervo Creek Gathering System that transports wet-gas.

When the transaction closes, the new Howard Energy Partners will own more than 450 miles of natural gas gathering pipelines in Dimmit, Frio, Maverick, Webb, and Zavala counties. The system currently gathers 175 mmcfd, but that amount will increase as more wells come online in the coming year.

The company plans to improve facilities to handle production from the Austin Chalk, Eagle Ford Shale, Escondido, Olmos, and San Miguel formations.

Crimson Exploration Provides Eagle Ford Update - Woodbine Wells Being Completed

Crimson Exploration provided an operations update on its Eagle Ford wells and is only days away from quantifying the success of Woodbine horizontal wells in Madison County. 

In Madison and Grimes counties, TX, Crimson is actively pursuing a drilling program on our 17,500 net acre position that is prospective for the Woodbine, Lewisville and Georgetown formations, among others. The Mosley #1H (88.8% WI), our first horizontal well targeting the Woodbine formation, began flowback operations on March 9th. Initial rates have been very positive as we clean the well up on a smaller choke. The well was drilled to a total measured depth of 15,650 feet, including a 6,300 foot lateral, and was completed using 23 stages of fracture stimulation.

At present, we are also drilling two additional horizontal wells in Madison County. Lateral lengths in both wells will range between 6,000 – 7,000 feet with 20 – 25 stages of fracture stimulation. Production from these wells is expected to commence mid-second quarter.

The company also completed or is completing Eagle Ford wells in Dimmit, Karnes, and Zavala counties:

The Glasscock A #1H (95.5% WI), in Karnes County, TX targeting the Eagle Ford Shale, commenced production at a gross initial production rate of 726 Boepd, or 665 barrels of oil and 365 mcf, on a 13/64th choke and 2,743 psi of casing pressure. Results from prior wells have been reported on 16/64” chokes, and Crimson expects to maintain this well at current choke size to determine the benefit of more restricted rates on EUR in this field. At the end of February, the Glasscock B #1H (93.7% WI) well spud and is currently drilling in the lateral section at 11,687 feet. The B #1H will be drilled to a total measured depth of 15,375 feet, including a 4,350 foot lateral with 18 – 20 stages of fracture stimulation.

In Dimmit County, Texas, the Beeler #1 (50% WI) oil well commenced production in mid-February at a gross 24-hour initial rate of 370 Barrels of oil equivalent, or 337 barrels of oil and 195 thousand cubic feet of natural gas, on an 18/64th choke. The well was drilled to a total measured depth of 14,428 feet, including a 7,200 foot lateral, and was completed using 20 stages of fracture stimulation. The KM Ranch #2H (50% WI) well in Zavala County, our second well in that area, has been drilled to a total measured depth of 12,875 feet, including a 6,100 foot lateral, and is awaiting completion. The completion of that well will be delayed until flowback of the Beeler well and its results can be evaluated, and a determination can be made on whether any change in the completion/flowback recipe for the area should be implemented.

Read the full press release at crimsonexploration.com

 

Anadarko Increases Eagle Ford Reserves - Resource Estimate to 600 mmboe

Anadarko increased its resource estimate for its Eagle Ford Shale properties to 600 million barrels of oil equivalent (mmboe) at its analyst day. The company also reported having before tax rates of return of more than 100% at as little as $2 natural gas prices, as long as oil is $100 per bbl. The average well across the company's acreage produces 65% liquids (40% oil & 25% NGLs).

Anadarko's 2012 Drilling Plans

Anadarko plans to drill 250 wells with 10 operated rigs in 2012 and will increase to 275+ wells in 2013.  The company has also doubled the expected number of wells with 4,000 planned locations. Over the past couple of years, the company has made significant operational improvements. Rig spud to rig release has fallen from 18 to 12 days, while drilling costs have remained below $2 million per well. Anadarko can also complete an individual stage in less than 8 hours and has driven completion costs below $5 million. The average well drilled in 2012 will have a lateral length of more than 6,600 ft. That's an increase of more than 2,000 ft per well over lateral lengths in 2009.

Anadarko's Eagle Ford Type Well

A typical well in the Eagle Ford for Anadarko displays the following characteristics:

  • 450 mboe EUR
  • Almost 600 boe/d IP, with a little less than 350 boe/d at the end of year one
  • 40% Oil, 25% NGLs, 35% Natural Gas
  • $5.8 million well costs

Additional Processing Capacity Coming Online

The company will also have the Brasada Processing Plant (200 mmcf/d) online in 2013. the Brasada Plant will add more than 5,000 b/d of NGLs production in 2013. Current expectations are for net sales volumes that almost reach 50,000 boe/d by year- end 2013.

Read more at anadarko.com