Anadarko Petroleum's Eagle Ford Drilling Process - Video

Anadarko's GM Danny Brown discusses the company's Eagle Ford operations and the drilling process typically utilized by the company.

Highlights from Anadarko presentation include:

• The company's operations border Mexico
• 25 fold increase in production over two years
• Anadarko wells are typically 7,000 ft deep with horizontal laterals of 6,000 ft (more than 10 Empire State building)
• 16 inch surface conductor is set at 100 ft deep
• Surface casing is set at approximately 2,000 ft
• Kick out and start the horizontal lateral just above the Eagle Ford formation
• 5 1/2 inch steel casing is set in the horizontal lateral
• Benefits in jobs and local economy are considerable

Read more about the company's assets at our Anadarko Eagle Ford page.

Forest Oil Targets the Eagle Ford's Upper Interval

Forest Oil Eagle Ford Acreage Map

Forest Oil has doubled 30-day initial production rates by targeting the upper interval of the Eagle Ford and completing wells with smaller frack stages. Production from recent wells has yielded 30-day IP rates of more than than 465 boe/d. That's up from a little more than 200 boe/d from initial development wells. Forest's well improvements are just one example of how operators will continue to improve well performance and recoveries in the Eagle Ford.

Read more from from the quarterly call at our Forest Oil Eagle Ford page.

Eagle Ford Rig Count at 284 Surpasses Record Again May 18, 2012

Drillingl Rig 5

The Eagle Ford Shale drilling rig count rose two rigs to surpass last week's record.  We now have 284 drilling units working the region. New records shouldn't be a surprise. Operators are flocking to the Eagle Ford's high liquids yields and promising economics. New projections from Bentek, UTSA, and other analyst all put the potential of the Eagle Ford around 1-2 million barrels per day of production. As stated before, that's in a market that only produced 5 million b/d a few years ago! As Adam Bedard put it this week at Bentek's Benposium, the U.S. and Canada are on a path to potential oil independence in the next decade. For the third week in a row, we're highlighting one of the most active operators in the Eagle Ford. Petrohawk, who was acquired by BHP in 2011, has 23 rigs active in the Eagle Ford. That's an increase of 10 rigs since October of 2011. The company has 9 drilling in McMullen County, 5 in DeWitt, 5 in Karnes, 3 in La Salle and one in Live Oak County.

Eagle Ford Oil & Gas Rigs

The natural gas directed rig count fell one to 73 rigs. After Karnes County dropped a rig, DeWitt, McMullen, and Webb are the only counties with more than ten gas rigs running. Henry Hub futures prices traded up another 10% this week to almost $2.74/mmbtu. That's a much welcomed move. Especially as oil prices dropped another $5 this week. We're trading just above $91/bbl WTI as of Friday evening. During the week, oil directed activity increased to 209 rigs.

259 horizontal rigs are running in the region, with 2 disposal wells being drilled in Atascosa County. Karnes and La Salle counties lead development with 41 rigs. Dimmit (31), McMullen (28), Webb (27), DeWitt (23), Gonzales (22), Live Oak (13), and Atascosa with 13 make up the top Eagle Ford counties.

News items and announcements this week included:

• Regency, Talisman, and Statoil Plan $150 Million Midstream Expansion
• Marathon Expects to Bring 16-20 Wells Online Per Month
• Aurora Oil & Gas Adds Sugarloaf Acreage for $95 Million

We spent most of the week at Bentek's Benposium in Houston. We heard from several industry leaders and plan to share the highlights in the coming days. Our first note from the event was published this morning - Eagle Ford's Location Provides Long-Term Strategic Advantages

Come back weekly for updates or sign up for alerts.

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

Eagle Ford's Location is Long-Term Strategic Advantage

After spending much of the week at Bentek's Benposium, it is clear the Eagle Ford's position in the Gulf Coast energy complex is a long-term advantage.

"The Eagle Ford is exciting because of its location to the Gulf Coast. With rich gas in close proximity to Mont Belvieu, the Eagle Ford's NGL net backs are among the highest in the country" - Kristen Holmquiest, NGL Analytics at Bentek

Energy Isn't New to Texas

The state of Texas leads oil & gas development in the U.S. Almost 44% of active onshore rigs are running in the state. The state has been an energy leader for decades......

For the Eagle Ford, that means the oil companies are close, infrastructure is close, and the chemical complex is very well developed. Midstream operators have announced $5 billion plus in expansions in the past six months. They will collectively add more than 3.2 Bcf/d in processing capacity in the region.

Even that is dwarfed by what oil & gas operators are spending, and both are setting the stage for what's to come. We're only one year into true development and the play is just starting to roll. The half a million barrels a day of liquids the play will produce by the end of the year is clearly on a path to double or triple in the subsequent five.

The play's location also means operators realize better prices. Oil produced in the Bakken Shale, due to constraints and transportation costs, can be priced at a discount from $10 to $20 per barrel less than WTI. Compare that to the Eagle Ford where we're currently seeing positive differentials to WTI, and you see why being close to the refineries is important. $10/bbl makes a big difference on the bottom line.

Risks to Eagle Ford Development

As with all oil & gas plays, the Eagle Ford isn't without risk. Its location offsets the major risks to some degree, but we've seen prices and economies change in the past. $100/bbl oil has driven development to current levels, but if prices dropped below $80/bbl, you'd begin to see a slow down.

As production grows, there could be growing pains. There is only so much capacity for the light crude in the Gulf Coast. If refiners don't act quickly, we could have periods where there simply isn't enough demand for Eagle Ford condensate.

Aurora Oil & Gas Adds Sugarloaf Acreage for $95 Million

Aurora Oil & Gas is continuing its quest to add acreage in the Sugarloaf field in South Texas. Just two weeks ago, Aurora made a bid for Eureka Energy, but Eureka's board wasn't excited about the proposal. This week, Aurora announced a deal that adds 1,440 net acres to the company's AMI in the Sugarloaf at a price tag of US$95 million.  Marathon Oil operates the property. Aurora will have a 21.8% non-operated interest in the field when the deal closes. If the company is able to close the Eureka deal, they would add an additional 6.25% interest in the AMI.