Anadarko Plans More Eagle Ford Drilling With Fewer Rigs

February 5, 2013 R.T. Dukes

Anadarko Petroleum's Eagle Ford assets will be developed with fewer rigs in 2013. Anadarko is dropping its average rig count from 10 to 8 after the company was able to drop its spud to rig release time by 26% in 2012. The average spud to rig release averaged 9.2 days during the quarter and a record 5.4 days was set.Anadarko hit another record as well when operated production surpassed 125,000 boe/d (54,400 net) at one point during the quarter. Production averaged 39,100 boe/d net during the quarter, which represents 71% growth over fourth quarter 2011 volumes.

The company continued its midstream expansion during the quarter as it extended an oil gathering line from Gardendale to Cotulla, as well as expanding gathering capacity to 350 mmcfd. On the processing side, the Brasada Plant, in La Salle County, is on pace to come online in the second quarter of 2013. The plant will be able to process 200 mmcfd and recover as much as 30,000 b/d of NGLs.

New Eagle Ford Workforce Housing Coming - Press Release

February 4, 2013 Kenny DuBose

New Workforce Housing is coming to the Eagle Ford. San Antonio based developer Koontz McCombs is in the final stages of construction of its second Eagle Ford Shale Workforce Housing development. The Sendero Ranch developments are located in Pearsall and Dilley and consist of custom built one and two-bedroom cottages, which are being leased to companies and individuals working in the Eagle Ford Shale oil and gas play.

Noel Perez, City Administrator, stated “While the majority of current developers are addressing the immediate need for housing for oil field related employment, our city is currently faced with a severe shortage of affordable housing. While we certainly welcome our new neighbors with open arms, we cannot forget that we also have a need for housing to be made available to residents not involved in the oil play. Residents who are still in their current jobs and those with relatively fixed incomes. The City of Dilley encourages all developers to consider perhaps the construction of more apartment complexes as well as affordable residential housing."

The gated communities at Sendero Ranch are not your typical man camps, but are more like a traditional subdivision with each cottage having its own private driveway and covered front porch. Each residence comes fully equipped with furnishings, housewares package, cable and high speed internet, linens, and weekly maid service. In addition, the properties feature a community center with a pavilion and BBQ area, recreation room with pool table, ping-pong table, large flat screen television, and a laundry facility.

The Pearsall location opened in June of 2012 and has two-bedroom residences available for occupancy. The Dilley location will be opening in early February 2013 and will consist of 85 two-bedroom residences. Our Dilley location also features commercial and industrial lots for sale.

For additional information on the Sendero Ranch developments please contact:

Loren Gulley Vice President, Koontz McCombs 210-841-9262 www.senderoranch.net

The article above was published through EagleFordShale.com's press release distribution service. Learn more at the Eagle Ford Advertising page.

Murphy Oil's Eagle Ford Production Hits Milestone

February 4, 2013 R.T. Dukes

Murphy Oil surpassed 25,000 boe/d at the end of 2012 and annualized production averaged 15,000 boe/d. With an exit rate above 25,000 boe/d, the company is in a nice position to meet or exceed its production target of 30,000 boe/d in 2013.

Murphy is working 10 rigs and three frack crews around the clock. The company has drilled 216 wells to date and has brought 163 to production. Total time spent to drill and case wells is averaging 11-13 days across the play.

Most of the crude the company produces is moved by truck (86%) -

Roger Jenkins, COO stated "There's many places to unload the trucks, many depots, many options. We're doing very well with our crude. Murphy's land situation is not a condensate one. For black oil, 41, 42 degree API, we've been getting a $13 positive margin to WTI there for some time. And people want our crude in that area and we're doing very well with the marketing quality of crude because we have very little condensate in our business."

The company will continue to push downspacing to 80-acres across all three areas operated in the Eagle Ford. Testing down to as little as 40-acres per well might take place late in 2013.

Watch for test results from the company's first Pearsall Shale well near the end of the first quarter of 2013. Two horizontal Pearsall wells are planned in Atascosa County in the first half of the year.

Expect to see operational costs come down as the company begins drilling four wells from each pad. Pad drilling will allow for the Murphy to allocate facilities in a more efficient manner.

Eagle Ford Regional Rig Count 252 - Feb 1, 2013

February 1, 2013 R.T. Dukes

The Eagle Ford Shale drilling rig count fell 3 rigs to average 252 running this past week. That's right in line with the average number of rigs running in January and 17 below the average of 269 rigs that ran throughout 2012. Honestly, it has been surprising the rig count has held this strong. Many analyst were calling for a larger drop in the rig count, but smaller operators have stepped in to help support activity. Larger operators lowered their rig count throughout 2012 as drilling times decreased. Faster drilling means you can drill more with less, so rigs get dropped.

ConocoPhillips is the perfect example of a company utilizing fewer rigs, but not necessarily drilling any less. The company utilized a peak of 17 rigs early in 2012, but lowered its rig count in the face of operational improvements that increased drilling speed. The backlog of drilled yet not completed wells simply grew over the year. Completion crews and gathering pipelines simply weren’t able to keep up with the rigs. ConocoPhillips (COP) has 11 rigs running as of January 2013.

Conoco's production also hit new highs as the company crossed the 100,000 boe/d mark in the fourth quarter. That's 100,000 boe/d from almost nothing three years ago.

Eagle Ford Oil & Gas Rigs

[ic-r]The natural gas rig count increased by two to 40 running this week. Gas prices continued two weeks of declines to trade at ~ $3.30/mmbtu on Friday afternoon.

The oil rig count fell five rigs to 210 running in the area. WTI crude futures were trading close to $98 per barrel to end the week. Eagle Ford crude priced at $110.53/bbl on the 31st of January. Eagle Ford light crude and condensate in the area traded at $94 and $93, respectively.

There are 225 horizontal rigs running in the region. A disposal well is being drilled in Frio County and an injection well is being drilled in Karnes County.

La Salle County leads development with 32 rigs running. DeWitt (24), McMullen (24), Webb (24), Dimmit (23), Karnes (22), Gonzales (22), Live Oak (21), Atascosa (10), Leon (7), Lavaca (7), and Frio (6) round out the top counties in the region. The drop from 31 rigs to 22 in Karnes County was almost entirely attributable to Marathon and ConocoPhillips. The two companies combined to move eight rigs out of Karnes County last week.

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates.

Eagle Ford 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.

Eagle Ford Shale Drilling by County

CHK Plans For New Leadership - McClendon Retiring

February 1, 2013 R.T. Dukes

Chesapeake's CEO, Aubrey McClendon, has announced plans to retire as of April 2013. McClendon founded Chesapeake in 1989 and, as a landman, was well suited to oversee the company's shale land grab over the past decade.

Chesapeake has a market cap of more than $13 billion, with underlying assets that have significant growth potential.

Mr. McClendon was a fairly controversial figure in the investing world as he led the most aggressive leasing strategy ever implemented. The company has leased millions of acres and in turn flipped a portion of the assets to other companies. The deals funded the company's shale leasing spree.

McClendon came under scrutiny multiple times throughout the past several years as his position magnified. The company's "founder well incentive", lucrative pay packages, and disagreements with a new board of directors eventually led to his demise.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, said: “Over the past 24 years, I have had the privilege of developing Chesapeake into one of the world’s premier energy companies. It has been an honor to work with my outstanding management team and the company’s 12,000 very talented and dedicated employees. I am extremely proud of what we have built over the last quarter of a century, and I am confident that Chesapeake is in a great position to continue to grow and achieve great success in the future as it realizes the full value of its outstanding assets. While I have certain philosophical differences with the new Board, I look forward to working collaboratively with the company and the Board to provide a smooth transition to new leadership for the company.”

His exit was announced as an early retirement, but legally it is "termination without cause" and he'll be entitled to a severance package worth as much as $50 million.

Chesapeake's Eagle Ford assets are a prime example of the company's leasing strategy. The company assembled more than 600,000 acres then sold a ~33% interest to CNOOC for $2 billion. CHK has continued to add acreage and controlled almost 500,000 acres as of the end of the third quarter 2012. Production has also surged over the past few years. Chesapeake literally grew its operated Eagle Ford production to over a 120,000 boe/d (52,000 net) from almost zero just four years ago.