Marathon Oil Shifts Focus to U.S. Shale

November 12, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Noble Q3 2015

Marathon Oil released its third quarter earnings this week and announced they will focus more of their attention on U.S. shale assets.

Related: Chesapeake Reports Q3 Loss

For the third quarter of 2015 Marathon had adjusted net losses of $138 million as they battle the prolonged downturn.

CEO Lee Tillman expects oil prices will remain low for a quite a while longer, so the company will continue its course of reducing costs and increasing efficiency. Marathon will also move away from conventional oil assets to focus on shale.

“Drilling efficiency remained a focus across our U.S. unconventional plays, with our best Eagle Ford rig drilling a well that averaged 3,000 feet per day in the third quarter, similar to the exceptional pacesetter performance in the previous quarter. This performance was achieved while maintaining our geo-steering accuracy to land in the target window 98% of the time.”

— Lee Tillman

Production in Marathon's Eagle Ford operations for Q3 averaged 128,000 net boed, a 9% increase above the year-ago quarter and compared to 135,000 net boed in the prior quarter. Other highlights include:

Company brought 57 wells to sales, of which 11 were Austin Chalk, six upper Eagle Ford and 40 lower Eagle Ford, compared to 52 wells to sales in the previous quarter.
Thirty-day initial production (IP) rates from the six upper Eagle Ford wells ranged from 1,050 to 1,480 net boed (57-76% liquids)
Wells drilled at an average rate of 2,000 feet per day, an 11% improvement over the previous quarter.
Drill time for an Eagle Ford well spud-to-total depth dropped to 10 days.
Company is exceeding its technical objectives with a 98% success rate geo-steering into a typical 25-foot target.

Noble Energy Cuts Eagle Ford Jobs

November 11, 2015 Elizabeth Alford

Houston-based Noble Energy plans to trim Eagle Ford jobs as it announces third quarter losses.

During an earnings call last week, Noble executives reported a $283 million net loss for the 2015 Q3 along with plans to trim capital spending and curtail exploration activity. Like many others, the company is putting these measures into place until the market rebounds enough to support increased spending.

In addition to the losses, Noble will lay off 180 jobs, including some in its Eagle Ford operations, according to Fuelfix. In April, the company cut 230 jobs.

“As we approach 2016, we intend to be cash flow neutral while maintaining long-term operational capacity,” spokeswoman Reba Reid said in a statement to Fuel Fix. “Our diverse portfolio offers exceptional investment options, and we will continue to focus capital allocation on activities that best deliver overall returns and value.”

Third Quarter Eagle Ford Highlights

During the quarter, we closed on the merger with Rosetta Resources, which established new core operating positions for NobleEnergy in the Eagle Ford and Delaware Basins.
Spud-to-rig release times averaged eight days for a 5,000-foot lateral, a reduction of approximately 30% from the average on these assets earlier this year
drilled seven Lower Eagle Ford wells
Most wells are performing materially above the 3 million-barrel type curve for the area

Real more at nobleenergyinc.com

Chesapeake Reports Q3 Loss

November 10, 2015 Elizabeth Alford

Chesapeake Energy Corporation reported its 2015 third quarter results, including projected activity for the Eagle Ford.

Related: Chesapeake Cuts 740 Jobs

In an earnings call last week, Chesapeake reported a net loss of $4.695 billion in the third quarter in contrast to a 3% year over year production increase. The company highlighted their focus on organizational and operational initiatives to face the extended low commodity price environment.

“We continue to focus on improving completion efficiency as a value differentiator at Chesapeake as measured through finding and development cost. We are drilling faster and cheaper, drilling longer laterals and enhancing our completion techniques to drive further value from each investment.”

— President and CEO Robert Douglas Lawler

For Chesapeake's Eagle Ford Shale operations, net production averaged approximately 108 thousand barrels of oil equivalent (mboe) per day, an increase of 3% sequentially. Other Eage Ford highlights include:

Average completed well costs to date in 2015 are $5.3 million, compared to $5.9 million for 2014.
Average completed lateral length of 6,000 feet, compared to 5,850 feet for 2014
Averaged three rigs in the 2015 third quarter, and the company anticipates maintaining three operated rigs through the end of the year.
Significant efficiencies with longer laterals and larger completions in the area
Expecting approximately 9% production growth this year compared to 2014
Currently have 19 wells drilled with greater than 9,000 foot laterals including two record 13,000 foot laterals

Oil Field Workers Sue for Wages

November 9, 2015 Elizabeth Alford

Chesapeake Before Texas High Court — Oil Field Workers Sue for Wages

Hundreds of oil and gas workers in the Eagle Ford and around the country are suing oil and gas companies to win back lost wages.

Related: Shale Industry Loses Billions

As producers tighten their belts and streamline their operations to cope with the current downturn, some of their measures to cut corners may have been on the backs of their workers.

According to San Antonio Express News, there has been an upward spike in federal litigation related to the Eagle Ford shale and other plays around the country. The suits claim a variety of wage infractions against companies including failure to pay overtime, mishandling bonuses and misclassifying salaried workers and independent contractors.

Since the beginning of the year, 72 lawsuits have been filed in the U.S. District Court in San Antonio by oil field workers. This is 2½ times the number from last year and is 7 times the number in 2013, when only 10 were recorded.

“When times are good and people are making money, they’re not thinking about how they’re getting paid. But when things start going south, that’s when the claims start to arise, because they either are not making as much money or they can see the writing on the wall.”

— San Antonio Attorney, Robert Kilgore

As of September 30th, theU.S. Department of Labor's Southwest Division has collected $22.3 million in wages on behalf of 4,700 workers. About $1 million of that amount was in the South Texas area on behalf of 590 workers.

Eagle Ford Rig Count Drops to 86

November 7, 2015 Elizabeth Alford

The Eagle Ford Shale rig count fell by four this week ending with 86 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, lower oil prices and the drop in oil field activity have continued to impact the economy, with the Texas Economic Activity Index declining for a 10th straight month in August.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford remained at 12 this week as natural gas prices rose slightly, trading at $2.37/mmbtu, a $.04 increase from the previous week.

The oil rig count dropped to 74 with WTI oil prices ending the week at $44.29, a decrease of $2.06. A total of 81 rigs are drilling horizontal wells, one are drilling directional wells, and four are vertical rigs. Karnes County leads the region in development with 21 rigs 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

Texas Oil & Gas Industry Will Prevail

Pioneer Resources Doubles Profits for Q3

Laborde Chosen as PSI Dealer/OEM

Anadarko Loses Big in Third Quarter

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.