Abraxas Reports Best Year on Record

March 9, 2015 Elizabeth Alford

Abraxas Petroleum released its 2014 earnings report on March 4th that heralded a record year and includes a strategic plan to ride out a “tumultuous” 2015.

Abraxas reported a fourth quarter net income of $30.1 million, compared to $27.0 million during the same period in 2013 and an adjusted net income of $6.1 million, over $1.4 million in 2013. Production numbers for Q4 averaged of 624 MBoe 6,785 Boepd.

2014 Highlights

2.1 MMBoe (5,720 Boepd) oil production
$134.1 million in revenue
$63.3 million net income
Adjusted net income $39.8 million, or $0.40 per share

“Our focused transformation over the last four years (...) has been very successful. And it has put Abraxas in a great position to not only weather the current storm, but to use the opportunities created by it for quality measured growth into the future.”

— Bob Watson, Abraxas' President and CEO

2015 Spending Plan

Citing a “very tumultuous 2015 from a commodity price perspective”, Watson said Abraxas will cut its capital expenditure budget to $54 million, compared with $193 million in 2014. The company expects to grow production 26% to 7100 barrels a day as it completes the nine wells it drilled during 2014.

“We expect to use this down cycle to our advantage and you should expect to see Abraxas emerge on the upside a bigger, stronger and even more profitable company with a clean balance sheet.”

— CEO Watson

Abraxas in the Eagle Ford

Abraxas reported that they completed drilling on two wells in its Eagle Ford operations during 2014 and will postpone completion until late spring or early summer to allow costs to decline even further. The company also has an eye to expand its operations in the Eagle Ford as conditions allow and anticipates activity to continue even during the entire down cycle. Abraxas owns 100% of all of our properties in the Eagle Ford, they remain very flexible and able to jump bakc into full production very quickly

Find out more at abraxaspetroleum.com

Read the full call transcript at seekingalpha.com

Eagle Ford Rig Count Falls to 174

March 6, 2015 Elizabeth Alford

The Eagle Ford Shale rig count decreased by 14 to 174 rigs running across our coverage by midday Friday.

In recent Eagle Ford news, Swift Energy reported a net loss for the fourth quarter of 2014 of $10.9 million, compared to a net income of $4.7 million in the same quarter in 2013. The company anticipates it will slash 2015 spending by an astonishing 70%.

The U.S. rig count fell another 72 to 1192 rigs running as of today. A total of 268 rigs were targeting natural gas (down 12 from the previous week) and 922 were targeting oil in the U.S. (64 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).538 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. 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 rigs declined to 22 rigs by midday. Natural gas prices decreased by $.12 from the previous week at $2.82/mmbtu on Friday afternoon.

The oil rig count declined by 14 to 172 rigs running by midday. WTI oil prices decreased by $1.32 from the previous week, trading at $49.18/bbl on Friday afternoon. A total of 160 rigs are drilling horizontal wells, three rigs are drilling directional wells, and vertical rigs lost one for a total of 11. Karnes (31), DeWitt (19), and Dimmit (18) 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

Sanchez Energy Ends Year Strong

Shopping for Good Deals at NAPE

Marathon Oil Reduces Budget Again

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.

Sanchez Energy Ends Year Strong

March 5, 2015 Elizabeth Alford

This week, Sanchez Energy announced fourth quarter and full year results for 2014 and updated the company’s capital spending plan for the new year.

In spite of dropping crude prices throughout the fall months, Sanchez reported fourth quarter revenues that were up 33% over the same period in 2013 and hit a record $172.5 million. The company also reported record production production averaging of 43,897 BOE/D.

Sanchez Energy has approximately 226,000 net acres in the Eagle Ford Shale in South Texas and includes 106,0000 acres in Catalina that were purchased in May 2014. This Dimmitt County property has proved to be a smart investment and is responsible for much of the company’s 2014 success.

“Throughout the past year, we achieved significant production and reserves growth through both the transformative acquisition of the Catarina asset as well as the ongoing development of our legacy Eagle Ford assets. Revenues, production, and proved reserves all more than doubled in 2014”

— Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy

Looking to 2015, Sanchez re-affirmed its capital plan at $600 - $650 million with production expected to average 40,000 to 44,000 BOE/DThe company will continue to focus on the Catarina property that continues to produce high rates of returns even in this lower commodity price environment. Company executives expect Catarina to produce the same high returns for the next 10 years.

Read the full report at sanchezenergycorp.com

Swift Energy Plans Massive Cuts

March 4, 2015 Elizabeth Alford

Swift Energy announces its 2014 results and anticipates 2015 by slashing spending by an astonishing 70%.

In its earnings call in late February, Swift Energy reported a net loss for the fourth quarter of 2014 of $10.9 million, compared to a net income of $4.7 million in the same quarter in 2013. The company also saw flat production between Q3 and Q4 with overall production numbers decreasing 3% from 2013 levels.

The bright spot for Swift in 2014 was what happened in the company’s Eagle Ford operations, which received approximately 85% of 2014 capital spending and saw a full year production increase of 32% from 2013. Additionally, Swift acquired another 12,635 acres of high quality, Eagle Ford gas acreage at in La Salle County.

“We believe our 2014 operation results clearly demonstrate our expertise in the Eagle Ford providing us with the multiple year drilling inventories at current commodity pricing and corresponding cost structures.”

— Swift COO, Bob Banks

Looking to the new year, Swift plans for massive cuts in its capital spending while still focusing on the Eagle Ford.

“I want to be very clear that we’re very aware of the commodity environment and the various opportunities as well as threats of continued low oil and gas prices. We will manage and operate in such way as to seek the best outcomes for all of our stakeholders. First, we revised our capital budget to the range of 110 million to 125 million. This is roughly 70% below our 2014 capital spend and at these levels we’re targeting production to be down between 6% to 8%.”

— Terry Swift, CEO of Swift Energy

Swift Energy is currently active in the following Eagle Ford counties:

Shopping for Good Deals

March 3, 2015 Elizabeth Alford

At the recent NAPE Summit in Houston, people from all sectors of the energy industry came together at a unique event for three days of networking, education and deal-making.

Certainly, the challenges of low oil prices were on everyone's mind. But if people were worried, the thousands in attendance did not give it away. The arena was filled with bankers, investors and drilling companies looking to talk business and shopping for good deals.

Related: NAPE Energy Summit 2015

NPR was on site at NAPE and talking to attendees about their perspectives and concerns. Kenny DuBose, mineral investor and shale oil publisher, sat down with John Ydstie and commented on his experience.

Mr. DuBose's comments were similar to others heard throughout the conference, as industry leaders and company owners expressed optimism about the future.

Access full interview at NPR.com