NAPE Energy Summit 2015

February 16, 2015 Elizabeth Alford

Last week, nearly 15,000 participants descended on Houston for the 2015 NAPE Summit, featuring international and business conferences as well as over 850 exhibitors. This annual networking event brings prospects, producers and purchasers together to forge important business connections and hear industry thought leaders.

If low oil prices are a predictor of where the industry is headed, you couldn’t tell by the packed convention hall and the atmosphere of optimism. Keynote speakers including Jack Stark, President and COO of Continental Resources, focused on the record production set by North American producers in the last five years. He listed some of the industry’s recent wins:

Unprecedented growth from 2005-2015
World changing upstream technologies
Discovering a whole new, vast class of reservoir (shale plays)
Reserves at all time highs
Created jobs and increased our energy independence
Improved efficiencies such as cutting drilling time from 45 days to 17
A midstream evolution: pipelines, rail, rail to barge and connections to all coasts

The Chief Upstream Strategist for IHS, Bob Fryklund, encouraged participants not to push the panic button too quickly. Fryklund acknowledged that the conversation has changed in recent months but was quick to remind participants of the cyclical nature of the industry and that history indicated we would weather this storm.

“OPEC and others discount the resilience of North America.” He added that, “we will not be a diminished producer because of what we are going through.”

— Bob Fryklund

The Keynote speakers took an optimistic tone, but some attendees expressed more caution. Several, who wished to remain anonymous, shared that they are convinced that a recovery is farther down the road. They expressed concern for their employees and their shareholders and are working to make hard decisions that will see them through the rest of 2015.

For more about NAPE, visit napexpo.com

Eagle Ford Shale Rigs Down to 196

February 13, 2015 Elizabeth Alford

The Eagle Ford Shale rig count decreased by five to 196 rigs running across our coverage area by the end of last week.

In recent Eagle Ford news, ConocoPhillips announced fourth quarter results for the 2014 and updated its capex plans for the coming year. Though production is expected to remain high, 2015 projections include a cut in spending for the Eagle Ford.

The U.S. rig count fell another 98 to 1358 rigs running by the end of last week. A total of 300 rigs were targeting natural gas (down 14 from the previous week) and 1056 were targeting oil in the U.S. (84 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).598 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties (181 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

Natural gas increased by three to 22 rigs running by the end of last week. Natural gas prices increased by $.22 from the previous week at $2.80/mmbtu on Friday afternoon.

The oil rig count decreased by five to 196 rigs running by the end of last week. WTI oil prices increased by $.95 from the previous week, trading at $52.64/bbl on Friday afternoon. A total of 185 rigs are drilling horizontal wells, two rigs are drilling directional wells, and nine rigs are drilling vertical wells. Karnes (31), Dimmit (25), and DeWitt (23) have the highest rig counts this week. See the full list below in the Eagle Ford Shale Drilling by County below

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Pioneer Resources Reveals Q4 & 2015 Capex

Comstock Resources Q4 Report

ConocoPhillips Reports Q4 Losses

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.

Rad full report at bakerhughes.com

Pioneer Resources Reveals Q4 & 2015 Capex

February 12, 2015 Elizabeth Alford

Pioneer Natural Resources, an Irving-based independent oil and gas company, announced its 2014 fourth quarter financials this week and revealed it will slash 2015 capex by 45%. Like many energy companies, Pioneer is making tough choices in order to ride out the current pricing storm.

Pioneer ended the year with a net income of of $431 million and strong production numbers including an 8% increase in oil production (up 15 MBOEPD) from the third quarter. 2014 Eagle Ford highlights include placing 16 horizontal wells on production exporting approximately 10 MBOEPD gross of Eagle Ford Shale condensate.

Related: Comstock Resources Q4 Report

Looking to the new year, the company estimates that of its $1.85 billion budget, $1.6 billion will be earmarked for drilling. The remainder of the funds will focus on infrastructure.

“In response to the current low oil price environment and reduced margins, we are preserving our strong cash position and balance sheet by reducing drilling activity and related infrastructure spending until margins improve significantly. Even with this slowdown, we will be able to continue to prudently develop and grow our industry-leading positions in the Spraberry/Wolfcamp and Eagle Ford Shale plays during 2015 by focusing our drilling activity in the best areas of both plays.”

Pioneer’s Eagle Ford Highlights for 2015

Approximately 20 MBOEPD gross (7 MBOEPD net) of Eagle Ford Shale condensate has been committed for export during 2015.
Part of the cuts in 2015 will include reducing horizontal drilling activity in Eagle Ford by six rigs. The company hopes to add horizontal rigs later in 2015 if conditions improve.

Read the full report at pxd.com

Comstock Resources Q4 Report

February 11, 2015 Elizabeth Alford

Comstock Resources released its Q4 earnings report and confirmed their spending plan for 2015.

Comstock’s loss of $55.1 million in the last three months of the year are in contrast to a record 86% increase growth in oil production. Production in 2014 was at 4.3 million barrels, compared to 2.3 million barrels produced in 2013.

Looking to the new year, Comstock will be scaling back its drilling program due to the significant drop in oil prices.

“With the rapid fall in oil prices, we have shutdown our oil drilling program in late December, but we do have eight additional wells in our South Texas Eagle Ford and nine additional wells in our East Texas Eagle Ford area that we expect to put on production in the first quarter of 2015. So we do expect a little more oil growth in the first quarter, but then we expect oil to decline later in the year with no additional drilling budgeted. For all of 2015, we’re expecting oil production to average between 9,500 and 10,500 barrels per day.”

— CFO Roland Burns

2014 Eagle Ford highlights:

Successful drilling program in South Texas Eagle Ford shale drove oil growth in 2014

68 out of 68 wells drilled were successful

Placed 91 (61.3 net) new Eagle Ford shale wells on production

Four wells drilled in 2014 to be completed in 2015

ConocoPhillips Reports Q4 Losses

February 10, 2015 Elizabeth Alford

On January 29th, ConocoPhillips announced fourth quarter results for the 2014 and updated its capex plans for the coming year. Though production is expected to remain high, 2015 projections include a cut in spending for the Eagle Ford.

Plummeting oil prices took its toll during the final months of 2014 with the company reporting a Q4 net loss of $39 million compared with 2013 Q4 earnings of $2.5 billion. Though oil prices have shown some sign of recovery, the company continued to show caution by reducing its expected 2015 capital expenditures to $11.5 billion since its last adjustment in December. Compared to 2014 number, this represents a ~33% reduction in spending.

The biggest cut will be a $1.4 million reduction in spending for development as the company plans to reduce a total of six rigs in the Eagle Ford in 2015.

“[The Eagle Ford] is still very economic, even at current prices. But having said that, it makes more economic sense to defer…We need to run probably three rigs to meet commitments on our leasehold, and we’re also keen to continue to learn on the Eagle Ford because we have a huge inventory there that we could develop over the next couple of decades.”

— Matt Fox, ConocoPhillips’s EVP of Exploration and Production

ConocoPhillips highlights that the Eagle Ford and Bakken combined production increased by 35 percent year-over-year and they are confident that their decisions will help them ride out the current storm.