Eagle Ford Regional Rig Count 273 Aug 9, 2013 - EOG Well Better Than Reported

August 9, 2013 R.T. Dukes

EOG Eagle Ford Oil Well Record Production

The Eagle Ford Shale drilling rig count fell one to average 273 rigs over the past week. That's just off the 2013 high set last week. Oil drilling levels fell four rigs further from the high of 241 set three weeks ago to settle at 230 running.

The U.S. rig count is down 4 to 1,778, of which 849 are running in Texas. A total of 386 rigs are targeting natural gas and 1,385 are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.).

Several companies reported earnings this week, but the highlight was EOG reporting its Record Eagle Ford Well In Gonzales County was better than initially reported to the RRC. EOG noted a production rate of more than 9,200 boe/d compared to the RRC report of a little more than 8,600 boe/d. Additionally, the well was producing more than 4,200 barrels of oil per day after 30 days. I'll go out on a limb and say that's going to be a money maker! Read more in the article EOG's Burrow Unit 5H Well Better Than First Reported

*Note* Now quoting Baker Hughes. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (~236 rigs). The rig count published here includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

[ic-l]Two natural gas rigs were added in the region to bring the total running up to 42 rigs. Natural gas futures were trading near $3.20/mmbtu on Friday afternoon. Cooler summer weather across the country has driven prices down over the past three weeks. Natural gas prices are more than $1 off the highs in late spring.

The oil rig count declined by four to 230 rigs running in the region this week. WTI prices were trading just below $107/bbl on Friday and have held above $100 for five weeks. Eagle Ford light crude traded at $102.50/bbl on August 9th.

A total of 209 rigs are drilling horizontal wells and just 15 rigs are drilling true vertical wells. McMullen & Karnes counties lead development with 33 and 32 rigs running, respectively. See the full list of drilling by county below.

South Texas Oil & Gas News:

Don't miss Tom Tunstall's piece on Texas Ghost Towns & Implications In The Eagle Ford

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Eagle Ford Shale Drilling by County

agle Ford Operated Rig Count By Company

SmithBits no longer reports its operated rig count, but we'll have updated number for you from a new source soon. Until then, you can reference our numbers from mid-April. There has not been a significant change in the overall rig count since this date:

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 Baker Hughes 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.

Swift Energy Will Fund Accelerated Eagle Ford Development With Louisiana Sale

August 9, 2013 R.T. Dukes

Swift Energy Eagle Ford Production Chart

Swift Energy has abandoned plans to find a joint venture partner in the Eagle Ford in favor of selling assets in Central Louisiana. Executives note the lack of premium placed on their Eagle Ford assets in the market. They view the Eagle ford as the best assets in the company and prices simply aren't what they were the past few years.

Instead, the company will sell assets in Louisiana. As a result, the capital budget in the Eagle Ford was increased by $50 million and Swift plans to maintain a two rig program through the rest of 2013.

Company-wide production was down slightly in the quarter and Eagle Ford production was down to flat. There were gas gathering constraints in Webb County during the quarter, but Eagle Ford production had rebounded to grow 10% in July.

“Our performance in the prolific Eagle Ford shale trend in South Texas continues to improve according to our plans. When compared to 2012, our 2013 South Texas well results have delivered higher initial production rates, larger estimated ultimate recoveries (“EURs”) and lower costs. Additionally, during July our average daily production rate in our South Texas core area was approximately 10% higher than our second quarter 2013 average production rate.”

— Terry Swift, CEO

During the second quarter, Swift drilled 14 operated wells targeting the Eagle Ford. A total of six wells were drilled in La Salle County, four in McMullen County, and two in Webb County. As for completions, the company brought 15 Eagle Ford wells and one Olmos well online during the quarter.

Production fell slightly in the second quarter, but had rebounded to increase 10% to almost 18,000 boe/d in July.

Watch for additional improvements in costs and initial production rates. Swift has lowered costs by 13-16% in the Artesia and N. AWP areas while improving initial production by 15-18%. That's a win-win.

Now that the company has turned its focus to developing the Eagle Ford and not simply seeking a JV partner, don't be surprised to see significant growth in the coming quarters. The company already expects 15-20% production growth in the area in 2014.

Marathon Oil's Eagle Ford Production Jumps 11% - Other Plays Look Promising

August 8, 2013 R.T. Dukes

Marathon Oil's Eagle Ford production jumped 11% to 80,000 boe/d during the second quarter.

Marathon drilled 82 gross Eagle Ford wells and brought 70 wells to production over the three month period. Marathon averaged more than three wells per Eagle Ford pad and 85% of its wells were drilled from pads in the second quarter. The company's spud to total depth drilling time as fallen to 12 days and spud-to-spud time averaged 18 days.

Expect well results from the company's 40-60 acre well pilots at the end of 2013.

Additional notes from the second quarter:

Production grew from 72,000 to 80,000 boe/d
Producing more gas. The percentage of oil production fell from 64% to 62%
Amount of production moving by pipeline grew from 65% to 70%

Austin Chalk & Pearsall Formations Proving Viable

Marathon has completed four Austin Chalk wells with horizontal laterals of a little more than 4,000 ft and initial production rates of almost 1,000 boe/d. A little less than half of the production stream is oil and condensate. The company compares the production stream to that of many Eagle Ford condensate wells.

The company also completed a Pearsall Shale well in the second quarter. The well came online at a 24-hour initial production rate of 580 boe/d.

Read the company's full press release at marathonoil.com

EOG's Burrow Unit 5H Well Better Than First Reported

August 7, 2013 R.T. Dukes

We published details from the Texas RRC completion report related to EOG's record Eagle Ford well, but the company's second quarter operations update proved the well was better than first reported.

EOG reported the well came online at more than 9,200 boe/d. That compares favorably to the 8,600 boe/d that was reported to the commission. Better yet, the well was still producing more than 4,200 barrels of oil per day after 30 days. The well is easily the best in the Eagle Ford to date.

The well easily produced more than 150,000 barrels of oil in its first month online!

Eagle Ford Growth Leads To Company-wide Increase In Guidance

As a result of performance in the company's liquids plays (i.e. Bakken & Eagle Ford), EOG is increasing annual crude oil production guidance from 28% to 35%.

“We have the confidence to raise the bar on EOG’s performance expectations because our outstanding assets perform better and better, quarter after quarter,” said CEO William R. “Bill” Thomas. “EOG expects to achieve these higher goals within our previously stated capex estimate.”

t the end of the second quarter, EOG was producing 173,000 boe/d from the Eagle Ford and had more than doubled initial production rates across much of the play.

The company highlighted several wells across La Salle, McMullen, and Gonzales counties that produced ~1,500 barrels of oil per day or more. The record Burrow 5H well was part of a unit that had two other wells come online at ~3,000 b/d of oil. It's easy to see why the company is increasing its production guidance.

“With wells in our western drilling program following the same trend as those in the east, results from the EOG’s Eagle Ford activity continue to outpace our expectations.”

— Papa

Rosetta Resources Acquires Additional Eagle Ford Interest At Gates Ranch

August 6, 2013 R.T. Dukes

Rosetta Resources Tom Hanks Eagle Ford Lease Map

Rosetta Resources completed 18 Eagle Ford wells in the second quarter and extended its streak of growing production from the play to 14 quarters (3.5 years). The growth didn't come without obstacles. Rosetta's Eagle Ford production was impacted by facilities constraints at Gates Ranch that are expected to last through August and wells that were shut-in for adjacent completions.

Rosetta added to its inventory of development with successful wells in both Live Oak and La Salle Counties. The first well in the 505 acre Lopez Unit in Live Oak County had a seven-day IP of almost 2,000 boe/d (46% oil). The first Eagle Ford well on the 3,500-acre Tom Hanks lease in La Salle County yielded more than 650 boe/d over the first seven days (91% oil). The two areas add 7 and 44 net locations to the company's drilling inventory, respectively. Rosetta also tested a Pearsall Shale well on the Tom Hanks lease that produced 5 mmcfd.

“Rosetta has core asset positions in two of the premier unconventional resource basins in the U.S. which will allow us to further expand our project inventory and efficiently execute our development plans to generate favorable growth and returns in 2013 and beyond.”

— Jim Craddock, CEO

Increased Gates Ranch Working Interest

Rosetta Eagle Ford Asset Map - June 2013

During the second quarter, Rosetta acquired an additional 10% working interest in Gates Ranch for $126 million. The deal increases the company's drilling inventory in the area by 17 net locations and added associated production of 1,800 boe/d. Rosetta now has over 29,000 net acres and a 100% interest in Gates Ranch.

The company also closed the previously announced acquisition of properties in the Permian Basin.