Eagle Ford Regional Rig Count 261 - Production Growth Continues - Nov 8, 2013

November 8, 2013 R.T. Dukes

The Eagle Ford Shale rig count increased by one rig from 260 to 261 running this past week.

We explored current Eagle Ford production and whether or not it is on its way to 2 million barrels of oil per day early in the week. Then, both Marathon and Chesapeake reported earnings with production figures that point to both companies surpassing 100,000 boe/d net before year-end. Both will likely eclipse the 100,000 b/d oil mark in the next two years. The Eagle Ford has been an economic boon for the state of Texas. Coupled with the Permian Basin the state is on pace to become one of the most influential suppliers in the world oil market.

The U.S. rig count increased 12 rigs from 1,742 to 1,754 running over the past week. A total of 365 rigs are targeting natural gas (5 more than last week) and 1,383 (7 more than last week) are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 834 or 48% of rigs active in the U.S. are running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (226 rigs). The rig count published on EagleFordShale.com 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]The natural gas rig count fell to 30 rigs running over the past week. Natural gas prices held relatively flat during the week and were trading around $3.55/mmbtu on Friday.

The oil rig count increased by four rigs from 226 to 230. WTI oil prices were trading around $95/bbl to end the week. Oil prices fell for two weeks then held flat this past week after holding above $100 for almost four months.. Eagle Ford light crude traded at $91.00/bbl on Nov 8th.

A total of 229 rigs are drilling horizontal wells, 18 rigs are drilling directional wells, and 14 rigs are drilling true vertical wells. DeWitt, Karnes, La Salle, Gonzales, and McMullen counties all have between 26 and 30 rigs running. See the full list of drilling by county below.

South Texas Oil & Gas News:

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Eagle Ford Shale Drilling by County

Eagle 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.

Chesapeake's Eagle Ford Production Set to Top 100,000 boe/d by Year-end

November 8, 2013 R.T. Dukes

Chesapeake Eagle Ford Acreage - Drilling Map

Chesapeake is on pace to surpass 100,000 boe/d of net Eagle Ford production in the fourth quarter. Average production in the third quarter was 211,000 gross (95,000 net) boe/d from the play.

Add back Eagle Ford assets sold to EXCO that produced over 6,000 boe/d during the quarter and Chesapeake would have already surpassed the 100,000 barrel mark.

Production is up 82% from the third quarter of 2012 and 11% over the second quarter.

“Our oil assets in the Eagle Ford Shale continue to deliver strong results, prompting us to raise our full-year 2013 oil production guidance by 2 million barrels (mmbbls) to 40 – 42 mmbbls.”

— Mr. Lawler

Chesapeake operated 13 rigs and brought 100 gross wells to sales during the quarter. The company is expected to run more like 20 rigs in 2014.

The average Eagle Ford well brought to sales in the third quarter came online at ~930 boe/d.

The company had 788 producing wells and 117 wells awaiting completion or infrastructure at the end of the quarter.

Read the full press release at chk.com

EOG Resources' Western Eagle Ford Acreage Looks Better & Better

November 7, 2013 R.T. Dukes

EOG Resources completed a well in Atascosa County that produced over 2,800 b/d of oil, 160 b/d of NGLs, and almost 1 mmcfd. The well is a record for EOG's Western Eagle Ford acreage.

The company also had wells in La Salle and McMullen counties that produced ~2,000 b/d or more during the third quarter.

Recent results prove new completion methods bring the Western Eagle Ford up to par with the company's prolific acreage to the east.

“EOG is consistently making the best oil wells in the best two oil plays in North America, the Eagle Ford and Bakken/Three Forks.”

— CEO William R. "Bill" Thomas.

EOG is running 25 rigs in the Eagle Ford, with 9 of those running in the western portion of the company's acreage.

EOG Eagle Ford Well Highlights

Kaiser Junior Unit #1H in Atascosa County produced 2,815 b/d of oil, 160 b/d of NGLs, and 940 mcf/d
Three wells in La Salle County came online producing oil at rates of 1,960-2,810 b/d
Five wells in McMullen County came online producing oil at rates of 1,970-2,115 b/d
Over 20% of the company's wells in the eastern portion of the play produced more than 2,500 b/d

"Because we now are achieving high growth, high rate-of-return results from our western acreage, we have effectively raised the bar for all of EOG's Eagle Ford acreage," Thomas said.

EOG Increases Company-wide Production Growth Estimates

Production guidance in 2013 has been increased again. EOG expects 39% growth in oil production, 17% growth in NGL production and company-wide growth of 9%. That's up from initial estimates of 28% crude oil growth, 10% NGL growth, and just 4% company-wide growth at the beginning of the year.

Halcon Resouces' Record Eagle Ford IP Comes From Step Out Well - Nears Acreage Target

November 6, 2013 R.T. Dukes

Halcon Resources set an initial production record from an Eagle Ford well in Brazos County that is a five mile step out from the nearest producing well. The Stasny-Honza 1H came online producing 1,262 boe/d.

Halcon has three rigs working in the area and plans to have four rigs active through 2014. The company spudded 13 wells and brought 19 wells to production in the third quarter. Net production from the area grew to 6,500 boe/d from 31 wells during the quarter. Eight wells are waiting to be completed and three wells are being drilled.

“Third quarter results were defined by continued expansion of our activities in the Williston Basin, El Halcón and other areas.”

— Floyd C. Wilson, Chairman and Chief Executive Officer

The company continues to work toward and optimal drilling and completion combination. The average time from spud-to-total depth decreased to 14.4 days during the quarter and the average drilling cost per foot decreased 19%. A company record was set by drilling a well with an 8,000 ft lateral in 7.3 days.

Halcon is closing in on its target of leasing 100,000 net acres in the area. The company has secured leases or commitments on 90,000 plus acres to date.

Company-wide more than 40% production growth is expected in 2014. Read the full release at halconresources.com

Marathon Oil Expects to Exit 2013 Producing 100,000 boe/d from the Eagle Ford

November 5, 2013 R.T. Dukes

Marathon Oil Eagle Ford Acreage Map & Improving Well Performance

Marathon Oil's Eagle Ford production averaged more than 90,000 boe/d at the end of October and is on pace to eclipse more than 100,000 boe/d by year-end 2013. Another important note is that more than 70% of oil production is now being transported by pipelines.

The company's production in the third quarter was roughly double that of the same period in 2012 at more than 81,000 boe/d. Production growth since the second quarter wasn't quite as impressive (up 1,200 boe/d or 3%), but the numbers were tempered by drilling to hold acreage in areas where the company has a lower working interest. A little less than 2/3rds of Marathon's production is considered oil and condensate, with the remainder split between NGLs and natural gas.

Marathon's average spud-to-total depth time averaged 12 days in the third quarter. That's 20% better than the more than 15 days the company spent in the third quarter of 2012. The company has also decreased its drilling and completion costs by more than 20% in the past year. One reason costs are down is 97% of wells in Q3 were drilled from pads. The average number of wells drilled per pad is up as well to 3.3 from 3.1 in the second quarter.

Marathon hit total depth on 70 gross wells and brought 71 gross wells to production during the third quarter. 85% of wells this year have been drilled on 60-acre spacing or less.

Read the full earnings press release at marathonoil.com