Encana's Reports Strong First Quarter

May 9, 2016 Elizabeth Alford

Chesapeake Released 2015 Q1 — Encana's Earnings Report

Dramatic cost reductions, operational innovation and Eagle Ford flexibility highlight Encana's first quarter.

Encana Corp. announced first quarter results last week, which included total production of 383,400 barrels of oil equivalent per day (BOE/d). The company reduced drilling and completions costs between 22 -44% over 2015 along with a 20% reduction in general administrative.

“We delivered a very strong operational performance during the quarter. We are achieving basin-leading well results in each of our core four plays, both in terms of cost and production performance.”

— CEO Douglas James Suttles

Eagle Ford Q1 Highlights

For Q1, Encana reported that their Eagle Ford operations delivered dramatic cost improvements for the sixth consecutive quarter. The flexibility of the company's Eagle Ford assets have made it a a core part of their portfolio.

Company expects to increase completions intensity for the remainder of the 2016 program, which will add $400,000 per well
Average Q1 D&C cost of $3.5 MM/well – Beat our $4.3 MM D&C cost target – 44% reduction from 2015 average
2 Upper Eagle Ford infill wells drilled on existing 6-well pad
Company expects production in Eagle Ford to modestly grow in Q2

“The one thing the Eagle Ford gives us is a tremendous amount of flexibility. The acreage is held, “ said Suttles. “This year’s program is largely what we think of as a drill-to-fill program. So we’re not building new facilities; we’re filling in where we have excess facility capacity to get better capital efficiency. But it’s very competitive.”

Eagle Ford Rig Count at 35

May 6, 2016 Elizabeth Alford

The Eagle Ford Shale rig count fell again this week, ending with 35 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the Texas Railroad Commission (RRC) granted a permit for a waste dump to be build on 143 acres in Nordheim amidst huge community opposition.

A total of 414 oil and gas rigs were running across the United States this week, down five from last week. 86 were targeting natural gas (one less than the previous week) and 328 were targeting oil in the U.S. (four less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)188 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 below.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford remained at six this week as natural gas prices declined slightly to $2.10/mmbtu.

The Eagle Ford rigs targeting oil fell this week to 29 with WTI oil prices dipping to $44.62, a $1.30 decrease this week. A total of 32 rigs are drilling horizontal wells, zero are drilling directional wells, and three are vertical rigs.

Karnes County leads development in the region with 11 rigs running 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

Anadarko Holds the Line on Spending

Eagle Ford Waste Facility Approved Amidst Protests

Cabot Waits to Resume Eagle Ford Drilling

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.

Anadarko Holds the Line on Spending

May 4, 2016 Elizabeth Alford

Anadarko Petroleum Corporation released its first quarter financials this week saying they have no plans to increase spending, regardless of crude prices.

Woodlands-based Anadarko announced$1.03 billion net loss for the first quarter of 2016 as well as a year-over-year capital reduction of approximately 50 percent. In an earnings call this week, executives stressed their current focus on safety and productivity and reported saving $800 million by reducing the dividend and staffing

Eagle Ford Activity

Anadarko's capital investment in the Eagle Ford for the first quarter was $37 million with production at 76 MBOE/d compared to 88MBOE/d for the same period last year. The company currently has zero rigs running in the region.

“What can you expect from us through the balance of the year? Do not expect us to increase our capital spending this year, even if oil exceeds $50,” said CEO R.A. Walker. “We’ll be very patient as we look beyond 2016 to a sustained higher-price environment to increase capital and return to a growth mode, if warranted.”

Anadarko is facing legal challenges in Colorado, where they are working on an agreement with the Boulder Valley School District over oil and gas drilling rights on an adjacent property new K-8th grade school. The district wants the company to relinquish the surface use rights they hold or agree to only access oil and gas through horizontal drilling.

Eagle Ford Waste Facility Approved Amidst Protests

May 3, 2016 Elizabeth Alford

DeWitt Residents Fight Wastewater Facility — Eagle Ford Waste Dump

The Eagle Ford will become home to a new oil and gas waste dump in the midst of huge community opposition.

Tuesday morning, the Texas Railroad Commission (RRC) granted a permit for the dump to be build on 143 acres in Nordheim, Texas.

Pyote Reclamation System has been trying to get approval for this project for more than three years, but the process has been mired in controversy. Many of the 307 residents of Nordheim have openly opposed the landfill, citing concerns over flooding and that the potentially dangerous site is too close to the city and their school.

Residents have been very proactive, sending in over 200 protest letters and even showing up at RRC meetings. After Tuesday's decision, many said they will continue to fight.

“Does your client understand the social license to operate they have asked for here?” Commissioner Ryan Sitton asked the attorney for the company that wants to build and operate the site. “I’ll be candid. I don’t like the site.”

Once complete, the facility will receive waste products from drilling sites in the Eagle Ford Shale that can include oil-based mud, soil contaminated by oil spills, and drill cuttings.

Cabot Waits to Resume Eagle Ford Drilling

May 2, 2016 Elizabeth Alford

Cabot executives recently announced plans to drill three Eagle Ford wells in second half of the year.

Cabot Oil and Gas delivered their 2016 first quarter results last week and credited their solid performance to financial discipline.

Quarterly highlights include a net loss of $55.4 million along with a positive cash flow of $62.1 million. The company decreased operating expenses to $2.26 per thousand cubic feet equivalent (Mcfe), a 3 percent improvement compared to $2.33 per Mcfe in the first quarter of 2015.

“At the current strip, our plans for the remainder of the year are focused solely on maintaining all of our leasehold obligations through 2016, and not increasing our operating activity above these minimum levels. However, our anticipated backlog of 15 drilled uncompleted wells at year end 2016 does allow for flexibility.”

— CEO Dan Dinges

Eagle Ford Activity

During the first quarter of the year, Cabot continued to focus on capital efficiency and cost savings for its Eagle Ford operations. Completions costs were down by approximately 30% compared to the same quarter in 2015. The company is not currently operating any rigs in the Eagle Ford Shale, but have plans to drill three additional wells in the second half of 2016.

Other Eagle Ford highlights include:

Net oil production was 11,908 Bbls per day, a decrease of 6 percent sequentially compared to the fourth quarter of 2015.
Drilled 3 net wells and completed and placed nine net wells on production
Wells have an average completion lateral length of 7,760 feet
Completed the company's longest Eagle Ford well to-date with 46 stages and a lateral length of 11,200 plus feeta