Marathon Acquires Paloma Partners' Eagle Ford Assets for $750 Million

Marathon Oil's Eagle Ford assets are expanding once again. The company has entered an agreement to acquire Paloma Partners II for $750,000,000. Paloma has approximately 17,000 acres across Karnes and Live Oak counties, with net production of 7,000 boe/d.

Paloma Partners II is a privately backed company funded by management, Encap, adn Macquarie.

Economic Impact of the Eagle Ford Shale - UTSA Study

UTSA's Institute for Economic Development is releasing its latest study at two luncheons. One on May 9 in San Antonio and another in Cotulla on May 11. Here are the highlights from the San Antonio event:

In 2011:

• Eagle Ford Shale development supported almost 50,000
• Total impact of the play was $25 billion
• Companies paid $3.1 billion in salaries related to the play's development
• 14 county core area has seen average salaries rise 27-34% across the board

In 2021:

• Total economic impact could range from a low case of $25 billion to a high case of $96 billion
• Eagle Ford could support 117,000 jobs. More than 2.5 times current employment

On a side note:

• UTSA inherited 5,000 acres years ago and is getting royalties from one lease that is paying $25,000 per month. The money is going straight to scholarships
• All statistics were taken from a mid-case or moderate view of development. If the high case comes to fruition, the play could contribute even more to South Texas.

Tom Tunstall and crew did a great job presenting the findings. We're blessed to have great resources like the Institute of Economic Development right in our backyard.

We were in San Antonio providing live updates. Be sure to Follow EagleFordShale.com on Twitter to get future updates. If you'd like email updates on news in the Eagle Ford, be sure you're getting our daily or weekly email updates.

You can read more about the study at utsa.edu

EOG Resources Ups Liquids Forecast - Testing Further Downspacing

EOG Resources is gaining more confidence in the Eagle Ford and its other liquids plays. The company has increased its liquids growth projections for the entire company from 30% up to 33% in 2012. Eagle Ford wells continue to exhibit improving recoveries as well flow rates hold up as the company drills at tighter spacing densities.

Our confidence level in the Eagle Ford is very high. Even after we implemented denser well spacing earlier this year, individual well performance remains remarkably strong. In fact, based on ongoing completion refinements, 30-day crude oil production rates from recent wells have increased, Papa said.

Production results and very strong 30-day flow rates from our Eagle Ford wells drilled on tighter spacing indicate we are effectively improving our completions.

Find individual well results and more comments at our EOG Resources Eagle Ford Shale page.

Pioneer Natural Resources (PXD) Grows Eagle Ford Production 15% in Q1

Pioneer Natural Resources continues its focus on lower costs and further improving its Eagle Ford assets.  Along the way, the company grew Eagle Ford production 15% quarter over quarter from 20,000 boe/d to 23,000 boe/d.  Current expectations are for more than 50,000 boe/d in 2014. Pioneer reported that results continue to hold up on the 45 wells where white sand was used instead of ceramic proppant in completions. The company tested white sand in more shallow areas of the play and has recognized a cost savings of $700,000 per well. If production results hold up, we might see a more significant shift to the use of white sand.

The company has 10 wells waiting to be completed and plans to bring online 125 wells this year. With 26 brought online in the first quarter, we'll see an increase to more than 30 wells per quarter over the remainder of the year.

You can read more quarterly commentary at our Pioneer Eagle Ford page.

Chesapeake Shifts One-Third of Capital to the Eagle Ford - Production Hits 75,000 boe/d

Chesapeake Energy's Eagle Ford assets will receive 30% of the company's capital budget in 2012 and 40% in 2013. The company is shifting capital from natural gas developments to oil in areas like the Eagle Ford and the Utica. Low natural gas prices are driving the shift to oil for many operators. Natural gas focused companies like Chesapeake are literally evolving before our eyes. The company grew crude oil production in the Eagle Ford from 25,000 b/d at the end of the year to over 55,000 b/d at the end of April. Bringing 30,000 b/d of crude onto the market in just a few short months is no small feat.

2012 and 2013 are proving to be very important years for the company's Eagle Ford assets. CHK is building an oil production base that will support development for years to come.

The company also plans on raising capital in the next few months by selling a volumetric production payment (VPP) related to the Eagle Ford. A VPP allows Chesapeake to recover some of its capital investment by selling future production today. VPP's usually have a prescribed time period and a prescribed volume. When those two obligations are met, existing production will revert back to Chesapeake.

Also, expect the company to slow down in terms of drilling activity in the next few months. Current plans only call for an average of 30 rigs running in 2012. As of last week, the company had 35 active, so they'll need to drop 7-10 rigs in the last half of the year to meet their current guidance.

Read additional quarterly commentary at our Chesapeake Eagle Ford page.