Chesapeake Accelerating Eagle Ford Pad Drilling Program in 2014

February 26, 2014 Kirk Eggleston

Chesapeake Pad Drilling Program in Eagle Ford

Chesapeake plans on increasing pad drilling in the Eagle Ford in 2014 and reducing average completed well costs to $6.4 million or less per well. The company has eased into pad drilling in the Eagle Ford, while other operators have aggressively pursued the procedure.

“Transitioning to pad drilling a little bit slower has allowed us to see what the competition is doing [in the Eagle Ford]”

— Mikell J. "Jason" Pigott, Sr. VP Operations, Southern Division

n the second quarter of 2014, Chesapeake intends on accelerating its production growth in the play.

Chesapeake Q4 Eagle Ford Production

In the fourth-quarter of 2013, Chesapeake's Eagle Ford net production was 87,000 net (191,000 gross) boe/d. That's down slightly from average production in the third-quarter, which was 95,000 net (211,000 gross) boe/d.

The peak average production rate was also down quarter-over-quarter from ~930 boe/d in the third quarter to 800 boe/d in the fourth-quarter.

Weather and a planned inventory reduction in the second and third quarters impacted fourth-quarter production in the Eagle Ford.

“In South Texas, we had a significant rain event that caused some flooding on the roads, [and slowed some of our operations in the fourth-quarter].”

— Pigott

Chesapeake's Eagle Ford production breakdown for the fourth-quarter was as follows:

Crude oil - 68%
NGL's - 14%
Natural Gas - 18%

In the fourth-quarter of 2013, 12 rigs were running in the Eagle Ford Shale, and Chesapeake brought 65 gross wells to sales. That's down slightly from the third-quarter where 13 rigs were running and 100 gross wells were brought to sales.

Chesapeake Highlights

Reducing average completed well costs to $6.4 million or less per well in 2014
87,000 net (191,000 gross) boe/d production in Q4 2013 - Down ~8% from Q3 2013
Peak average production - 800 boe/d in Q4
Weather impacted production in Q4
12 rigs running and 65 gross wells to sales in Q4 2013
Eagle Ford production - 68% crude oil, 14% NGLs, 18% Natural Gas

EOG Resources Increases Eagle Ford Resource Potential by 1 Billion BOE in 2013

February 25, 2014 Kirk Eggleston

EOG Resource's Eagle Ford resource potential went up 45% to 3.2 billion boe from 2.2 billion boe in 2013.

In 2014, EOG will be focusing a large portion of its $8.1 - $8.3 billion capital budget in the Eagle Ford Shale. This decision comes on the heels of increased well productivity and initial production rates in the play in 2013.

The company has plans to drill 520 net wells across its Eagle Ford acreage. At that rate, the company has a drilling inventory in the Eagle Ford of more than 12 years.

EOG Resources Reserves in the Eagle Ford

EOG's resource potential increased from 2.2 billion boe to 3.2 billion boe. That's a significant increase, and it gives EOG a lot of running room to develop the play and produce better results over a long time frame.

“To put our Eagle Ford position in simple terms, our current reserve potential is almost four times what we estimated four years ago when EOG discovered the play. With approximately 7,200 total identified individual net well locations, we still have about 6,000 net wells to drill across EOG’s 120-mile crude oil window,” said CEO, William Thomas. “Our in-house talent keeps finding ways to improve development of this world-class shale asset where we hold a critical mass of very desirable acreage.”

n 2013, EOG continued its downspacing efforts in the Eagle Ford. Even with downspacing, net reserves per well increased to 450,000 boe from 400,000 boe in 2013.

“Forty acre spacing per well is how we are moving forward [for the immediate future].”

— Thomas

EOG Eagle Ford Well Highlights

Boothe Unit #3H, #4H and #17H (Gonzales County)

Initial production began during the fourth-quarter - 2013

2,630 - 3,375 b/d crude oil
365 - 520 b/d NGLs
2.1 - 3 mmcf/d natural gas

Rudolph Unit #1H (Gonzales County)

4,230 b/d crude oil
505 b/d NGLS
2.9 mmcf/d natural gas

Nichols Unit #3H (Gonzales County)

3,830 b/d crude oil
390 b/d NGLs
2.3 mmcf/d natural gas

Wilde Trust Unit #1H, #2H and #3H (Gonzales County)

960,000 b/d crude oil over 200 day time period

Fleetwood Unit #1H and #2H (Karnes County)

3,630 - 3,435 b/d crude oil respectively
345 and 350 b/d NGLs respectively
2.0 mmcf/d natural gas each

Naylor Jones Unit 42 #1H, #2H and 60 #2H (McMullen County)

1,755 - 2,050 b/d crude oil
195 - 205 b/d NGLs
1.1 - 1.2 mmcfd of natural gas

Further Unit #1H and #2H (LaSalle County)

2,605 - 2,550 b/d crude oil
125 - 155 b/d NGLs
725 - 900 mcf/d

EOG has approximately 68,000 net acres prospective for natural gas. If the price of natural gas stays high, then EOG may decide to spend more in this area.

Cabot Completing First Six-Well Pad in Eagle Ford in 2014

February 24, 2014 Kirk Eggleston

Cabot's first four-well pads in the Eagle Ford came online during the fourth-quarter of 2013 and produced an average peak 24-hour rate per well of 885 boe/d.

The company had record production in 2013 of ~412 bcfe or 1.13 bcfe/d, an increase of 55% over 2012. Also, the company's longest lateral well (8,708') came online in the Eagle Ford in 2013. The well was completed with 31 frac stages, and reached a peak 24-hour rate of 1,344 boe/d (92% oil).

Cabot Completing First Six Well Pad in 2014

Cabot is completing its first six-well pad, which includes four wells with lateral lengths of approximately 8,000'. The six-well pad is expected to provide approximately $600,000 of cost savings per well.

Cabot Eagle Ford 2014 Plans

Cabot is planning on 40 - 50 Eagle Ford wells in 2014. If the company sees better than expected results from its drilling efforts in the Eagle Ford, you may see more activity than currently planned, according to CEO, Dan Dinges.

“We are [] at 36 to 38 [] Eagle Ford wells right now, so [] that’s incorporated already in our guidance. So, moving that up to even 50 would be an impactful move for our current guidance.”

— Dan Dinges

abot, which is also active in the Marcellus Shale, is focused on maximizing operating efficiencies and managing its price risk in 2014. Cabot announced that it will continue to monitor regional natural gas prices before making a decision on further acceleration in 2014 in the Marcellus. Maintaining the Marcellus rig count at six rigs will reduce the 2014 capital budget from $1.375 to $1.475 billion to $1.3 to $1.4 billion.

“We have elected to stay at eight rigs in our total program, which is what we ended at our — ended ‘13 with, which includes six in the Marcellus and two in the Eagle Ford. And while we will be permitting and be prepared to add additional rigs during the year, we are pleased that our revised program spending — spends less capital but delivers the same absolute midpoint of production guidance.”

— Dan Dinges

Cabot Highlights

Record production of 413.6 billion cubic feet equivalent bcfe, an increase of 55 % over 2012
First four-well pads in the Eagle Ford came online during the fourth-quarter of 2013 and produced an average peak 24-hour rate per well of 885 boe/d.
Peak 24-hour rate of 1,344 boe/d (92% oil) for Eagle Ford lateral well
Completing its first six-well Eagle Ford pad, which includes four wells with lateral lengths of approximately 8,000'
Maintaining Marcellus Shale rig count at 6 will reduce 2014 capital budget to $1.3 to $1.4 billion

Eagle Ford Rig Count - 264 - SM Energy Eagle Ford Oil Production Down Slightly in Q4 - 2013

February 21, 2014 Kirk Eggleston

The Eagle Ford Shale rig count stayed flat at 264 rigs running over the past week.

In recent news, SM Energy completed 95 wells in its operated Eagle For acreage. The company had production of 74,800 boe/d in the Eagle Ford in the fourth-quarter. Although production was at its highest during this time, there was less oil production.

The U.S. rig count increased by 7 to 1,771 running over the past week. A total of 342 rigs are targeting natural gas (5 more than last week) and 1,425 are targeting oil in the U.S. (2 more than last week). The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 846or ~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 (221 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

The natural gas rig count decreased by one rig to 35 running this past week. Average rig counts for natural gas production in 2012 were around 82 and then dropped to around 41 in 2013. Over the past week, natural gas increased to $6.13/mmbtu on Friday afternoon.

The oil rig count increased by 1 to 229 rigs running. WTI oil prices stayed relatively flat, trading at $102.11/bbl by the end of the week. Eagle Ford light crude traded at $99.50/bbl on February 20th.

A total of 235 rigs are drilling horizontal wells, 17 rigs are drilling directional wells, and 12 rigs are drilling true vertical wells. Karnes, La Salle, Dimmit and McMullen counties each have at minimum 29 rigs running. LaSalle County has the highest rig count this week at 33. See the full list below in the Eagle Ford Shale Drilling by County:

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 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.

SM Energy Completes 95 Eagle Ford Wells in 2013 - 74,800 boe/d in Fourth Quarter

February 21, 2014 Kirk Eggleston

SM Energy made 95 flowing completions in its operated Eagle Ford Shale acreage in 2013, with 20 of those completions in the fourth-quarter.

In non-operated Eagle Ford acreage, the operator completed 84 gross wells in the fourth-quarter.

The company had production of 74,800 boe/d in the Eagle Ford in the fourth-quarter. Although production was at its highest during this time, there was less oil production.

“Liquids growth in 2013 resulted in a 50:50 liquids-gas split for both the third and fourth quarters of 2013. Although our actual oil rate was down slightly quarter-over-quarter due to the fact most of the Eagle Ford completions during the fourth-quarter were in southern lower oil yield areas than in the third quarter.”

— CEO Javan Ottoson

SM Energy 2013 Drilling and Proved Reserves in Eagle Ford

At the end of the year, SM Energy had 246 net wells producing in the Eagle Ford and 239 mmboe of total proved reserves at the end of 2013. During 2013, the company's operated well costs decreased by approximately 14% from 2012 in both the Briscoe and Galvan Ranch portions of its acreage position.

During the quarter in non-operated Eagle Ford acreage, the operator added one drilling rig to the program, ending the quarter with 10 rigs. In the fourth-quarter, the operator commissioned additional compression, which added throughput capacity to its program.

SM Energy 2014 Eagle Ford Plans

In 2014, SM Energy plans to make approximately 100 flowing completions on its' operated acreage, with 60% of the activity in Galvan Ranch and the rest of the activity in Briscoe Ranch. Various completion design tests throughout the company's Eagle Ford acreage have been planned to maximize economics.

SM Energy Fourth-Quarter Company-Wide Daily Production in 2013

Oil production company-wide was up 31% in the fourth-quarter of 2013 to 40,800 b/d from 31,300. Natural gas production was up 24% to 429.3 mmcf/d from 347.1 mmcf/d. NGL production was up 51% to 31,500 b/d from 20,800 b/d. Oil Equivalent production was up 31% to 143,800 b/d from 109,900 b/d.

SM Energy Eagle Ford Highlights - 2013

95 flowing completions in operated Eagle Ford shale program for the year
84 gross wells c0mpleted in the fourth-quarter of 2013 in non-operated Eagle Ford acreage
74,800 boe/d in the Eagle Ford in the fourth-quarter
246 net wells producing at the end of 2013
239 mmboe of total proved reserves
Q4 Eagle Ford completions were in southern lower oil yield area, yielding less total liquids production for the company

SM Energy Company-Wide Production Highlights

2013 Q4 company wide oil production up 31% - 40,800 b/d
2013 Q4 company wide natural gas production up 24% - 429.3 mmcf/d
2013 Q4 company wide ngl production up 51% to 31,500 b/d
2013 Q4 company wide oil equivalent production up 31% to 143,800 b/d