Eagle Ford Shale In(Formation)

EAGLE FORD SHALE:  SATURATING SOUTH TEXAS

 

Eagle Ford Shale South Texas

“We believe the South Texas Eagle Ford horizontal crude oil play will prove to be one of the most significant United States oil discoveries in the past 40 years”
Mark G. Papa, Chairman and Chief Executive Officer – EOG Resources

What is the Eagle Shale Formation?

The Eagleford Shale is a shale rock formation located in multiple counties in South Texas.  The Eagle Ford Shale Formation has been one of the hottest shale plays this year because several companies are finding huge pools of oil & natural gas.  Oil can be found in McMullen County, Texas and Natural Gas has been found in the Eagle Ford Shale located in La Salle County, TX.

The Eagle Ford Shale is located directly below the Austin Chalk Formation and is estimated in some spots to be as deep as 11,300 feet.  While the Eagle Ford Shale has mainly been tested in a few counties located in South Texas, the Eagle Ford Shale extends up toward Dallas County and has an average thickness of 475 feet.  The Eagle Ford formation was named after exposures around the small settlement of Eagle Ford, which is situated on the south side of the Trinity north of Arcadia Park.

Oil & Natural Gas can be found in the following counties in south Texas: Oil: Atascosa County, Wilson County, Gonzales County, Karnes County, De Witt County, McMullen County, Live Oak County. Natural Gas: Atascosa County, Wilson County, Gonzales County, Karnes County, De Witt County, McMullen County, Live Oak County, Frio County, La Salle County, Duval County, Bee County, Bexar County, Zavala County, Maverick County, Dimmit County, Webb County, Zapata County –  More Counties to come when companies extend their acreage and do more well tests.

As you will see below, several companies are currently active in the Eagleford shale.  Chesapeake Energy is the clear leader so far with around 550,000 acres.  This increase in Eagle Ford Shale acreage moves Apache (APA) to 2nd place.   EOG Resources has arrived and is calling the Eagle Ford Shale the biggest oil discovery in 40 years.  They obviously have acreage in the oil zone of the Eagle Ford Shale.  Think about the Bakken Shale and what it did for Continental Resources ( CLR ).

*Petrohawk Energy ( HK )-

Petrohawk is drilling the Eagle Ford Shale in La Salle County, Texas.  They are actually drilling for natural gas and had a well hit over 9.1 million cubic feet per day.  Petrohawk has over 100,000 acres of mineral leases.  Petrohawk has been famous for their early discovery of parts of the Haynesville Shale located in East Texas and Louisiana

Recent Eagle Ford Shale News

*Crimson Exploration (CXPO)

In our Fashing area, approximately 16 miles to the north of our Pawnee area, and where we own an approximate 50% working interest in 1,500 gross HBP acres, leasing and drilling activity has increased dramatically. EOG has been active, drilling and permitting horizontal wells approximately two miles north of our leasehold, which is currently believed to be in the oil corridor of the Eagle Ford Shale Play.

What is ahead for the Eagleford Shale in 2011? The Eagle Ford Shale was the hottest oil shale formation in the United States in 2010 and it will remain that way in 2011.  While most of the acreage scamble is winding down, the Eagle Ford Shale is set to produce a ton of oil in 2011.  The big players in the Eagleford Shale are here to stay but the natural gas window of the play is turning out like the Haynesville Shale , quiet.  If Natural Gas prices ever rebound, the Eagle Ford Shale will make a one two punch with high Oil & Natural Gas well rates.  Also, I am looking for more big joint ventures to come in 2011 in the oil zone of the Eagle Ford Shale.  Oil Prices in 2011 should trade well into the $100s with a high of $110+. I am expecting Natural Gas to move back into the $5’s sometime in 2010.   Check out the excitement in the Niobrara Shale & Permian Basin where oil is flowing big time.

EOG Resources (EOG) announces major oil discovery in the Eagleford Shale – In South Texas, EOG has accumulated acreage across six counties in the Eagle Ford Play.

*EOG Resources EOG

In the South Texas Eagle Ford Play, EOG has steadily escalated the pace of both its drilling and completion operations. Results from the 77 wells drilled to date across its 120-mile, 505,000 net acre position in the mature oil window, reinforce EOGs confidence in its estimated 900 million barrels of oil equivalent, net after royalty resource potential, 77 percent of which is crude oil.

Patterned after successful development activity in its other resource plays, EOG is drilling and completing wells in batches to optimize resource recovery. Significant production increases are expected in 2011 as numerous clusters of wells are turned to production. Currently operating a 10-rig drilling program in the Eagle Ford, EOG plans to add one more rig by year-end and average 14 rigs in 2011.

Among EOG’s South Texas Eagle Ford wells, in which EOG has a 100 percent working interest, are:

Cusack Clampit #1H, #2H, #3H and #4H – This cluster of Gonzales County wells began flowing to sales at rates of 860 to 1,800 barrels of oil per day (Bopd) with 1,020 to 1,770 thousand cubic feet per day (Mcfd) of rich natural gas.

Beynon #1H – This Karnes County well was completed at an initial peak rate of 902 Bopd with 1,110 Mcfd of rich natural gas.

Greenlow #5H – Drilled in Karnes County, this well began initial production at a rate of 720 Bopd with 1,030 Mcfd of rich natural gas.

“Well data generated throughout the year from the Eagle Ford reflects an increase in our estimates of recoveries per well relative to our April 2010 estimates. This upside not only enhances the rate of return of the play but indicates fewer wells than we originally anticipated will be needed to capture our net reserve potential of 900 million barrels of oil equivalent,” said Mark G. Papa, Chairman and Chief Executive Officer.

With an active 16-rig drilling program in the Fort Worth Barnett Combo, this key EOG asset is in full development mode. After alleviating fracture crew constraints during the first half of 2010, EOG is focusing on multi-well development patterns in Montague and western Cooke Counties. Recent drilling results in Cooke County have expanded EOG’s Core area from 150,000 to 160,000 net acres. EOG expects to exit 2010 with strong crude oil production momentum that will carry into 2011 and beyond. In the current natural gas environment, Combo economics are bolstered by the mix of oil and rich natural gas production                             with total liquids production contributing over 90 percent of revenue. In the past, liquids had contributed roughly 66 percent of the revenue stream from the play.

The Eagleford Shale welcomes ConocoPhillips ( COP ) as of March 11, 2009. The CEO, Jeff Mulva, said in a meeting today that they are scaling back operations in North America but have been quietly been accumulating mineral rights acreage in the Eagleford Formation ( Maverick and La Salle Counties ).  As the owner of this website, I pretty much know whats going on as far as the drillers.  I can tell you that some of the well data that has come out on the Eagleford over the past several months has been in the same ball park as the haynesville shale, which will end up being the biggest natural gas field in the USA.  There is also some nice oil recoveries going on as well, similiar to the bakken formation in North Dakota.

*Chesapeake Energy CHK

Eagle Ford Shale (South Texas): Chesapeake has built a leading position in the liquids-rich portion of the Eagle Ford Shale in South Texas with approximately 550,000 net acres of Eagle Ford Shale leasehold, an increase of approximately 150,000 net acres from the 2010 first quarter. Chesapeake has drilled and completed seven gross wells to date and anticipates operating an average of approximately five rigs in the Eagle Ford in 2010.  In 2011 and 2012, the company expects to increase its drilling activity to an average of 16 and 27 rigs, respectively.  Chesapeake expects to conclude ongoing Eagle Ford Shale joint venture discussions and announce a joint venture transaction by the end of the 2010 third quarter.

Three notable recent wells completed by Chesapeake in the Eagle Ford Shale are as follows:

The PGE Browne 1-H in Webb County, TX achieved a peak 24-hour rate of 4.0 mmcf and 1,200 bbls per day, or 11.2 mmcfe per day;

The Lazy A Cotulla 1H in Dimmit County, TX achieved a peak 24-hour rate of 0.3 mmcf and 930 bbls per day, or 5.9 mmcfe per day; and

The Traylor North 1H in Zavala County, TX achieved a peak 24-hour rate of 0.3 mmcf and 930 bbls per day, or 5.9 mmcfe per day.

*Apache Corp ( APA )

Apache is now the leader in the Eagle Ford Shale.  Apache leads two of the hottest natural gas shale plays in North America.  The other would be the Horn River Basin which is located in British Columbia.

Leo Mariani – RBC Capital Markets ConocoPhillips ( COP ) – Eagle Ford Shale Update – ConocoPhillips continued its focus on the liquids rich Eagle Ford, Bakken and North Barnett shale plays, further accelerating appraisal and development drilling programs, with production ramping up in the third quarter of 2010. In Eagle Ford, the company has nine rigs currently active, with 15 wells successfully drilled and eight completed in the play during the third quarter. The company expects the pace of activity to continue to increase during the fourth quarter of 2010.  These wells are generally around 1,500 BOE per day ( 30 day rate ). Well costs are running in the $8 million to $9 million per well range. I don’t know if we’ve given an ultimate reserve number on the field or by well, but we’re really encouraged by what we’ve seen so far. I think there is some information that’s out there publicly that I could share with you on our well results. We think we’re in the just the right spot at Eagle Ford, and we’re really encouraged by the results.

Conoco Phillips 2011 Update

We continue to operate at an elevated development activity in the liquids-rich plays of Eagle Ford, Bakken and North Barnett. At Eagle Ford, we’re currently running 12 rigs in the play, and we expect increase that to 13 rigs in the near future. We also have three dedicated completion crews working in the play.  We have very aggressive development programs going on in the Eagle Ford in particular. The Eagle Ford, as we mentioned earlier, we’re running 12 rigs now. That’s probably going up to 13. We’ll look to drill probably 140 to 150 wells in the Eagle Ford this year.

*Exxon Mobile XOM –  April 2010 – In the Eagle Ford shale gas play, we are preparing for drilling operations

*Occidental Petroleum OXY

Occidental Petroleum has entered the Eagle Ford Shale in South Texas – The South Texas acquisition from Shell were about $1.8 billion gives us properties, which have over 320 billion cubic feet of gas equivalent, improved and developed reservoirs and are liquids-rich with a solid inventory of building opportunities. Oxy has already made producing in Texas, and East South Texas assets further expand our footprint in the state.

*Murphy Oil (MUR )

Eagle Ford Shale in South Texas – New development projects continue to be brought forward, and we sanctioned the first part our Eagle Ford program before yearend. This first one in Karnes County saw excellent oil results throughout the year and currently has two rigs working. In Karnes we are very happy. Our Board sanctioned the development of part of our Karnes acreage. We’ve built 10 wells to-date and completed four. A couple of wells have been on for quite a bit of time. One of them has achieved 170,000 barrels. One has achieved 83,000 barrels. We think both wells are above the tight curve that we use, and so they are likely to recover probably 700,000 barrels versus 500,000 which is kind of the tight curve when used there.  We have also got drilling in Dimmit County. We have three wells drilled and two completed. And these wells look like they are about based on the nearby results from others and ours, 35,000 EUR-type wells. Our best IP rate was just over 200 barrels, but we (choked) it back to be able to let the well unload and then extend its plateau around one that didn’t have a high rate.And then we are in the third oil area in our acreage in Northern McMullen County. We’ve just filled the well and log results are very encouraging, and we are going to move forward and frac that here and hope to have some results in the first quarter.

*Cabot Oil & Gas (COG) –

Moving down further South Texas, as reported last night, the Company successfully completed its third Eagle Ford well, the Arminius Energy Trust #2H, which is a 100% operated Cabot well. Located in Frio County, it was drilled to a total depth of 13,175 with a 4,325 foot lateral and is cleaning up, and hit a peak rate of over 600 barrels equivalent yesterday. This well is located in our Buckhorn area. The fourth Company-operated well, the Cromwell Ranch 1H, another 100% Cabot well located in La Salle County, was drilled with a lateral length of 6,000 feet and is scheduled for completion in the next couple of weeks. Additionally, additional drilling in the prospect area is scheduled for later this quarter. Cabot holds approximately 53,000 net acres in the oil window of the play and has over 300 net potential locations.Also in the Eagle Ford oil trend, drilling on our 18,000 acre area of mutual interest with EOG is scheduled to begin by year-end. Each company, as you might be aware, contributed 50% of the acreage in the JV with the operator EOG. The current plan is to keep at least one rig active in the JV area throughout 2011. With our South Region capital being allocated between our operated Buckhorn area and the EOG JV, we anticipate potentially doubling our oil volumes in 2011 from 2010.

*Pioneer Natural Resources (PXD_ –

In the highly prospective Eagle Ford Shale in South Texas, Pioneer has successfully drilled and completed 14 horizontal wells. Six of the wells are on production, including one which began flowing to sales this month after the startup of Pioneer’s first central gathering plant which provides gas processing and condensate stabilization. The remaining eight wells are expected to be brought online by mid-January following the completion of four additional central gathering plants. Eight additional wells are awaiting completion and will also be brought online as the four central gathering plants are completed.The Company’s drilling program in the Eagle Ford Shale has continued to deliver strong initial production rates. Average initial production rates for the eight wells drilled during the June through October period averaged 2 MBOEPD on 24-hour restricted flow tests with an average condensate yield of 120 barrels per million cubic feet, a liquids yield of 55% and an average heat content of 1,220 British thermal units per cubic foot. The average flowing tubing pressure on these wells was 6,200 pounds per square inch.

Pioneer now has seven rigs running in the play as planned. Along with the drilling ramp up, drilling efficiency improvements are also being achieved, with drilling times having been reduced by 20% since inception. Pioneer and its joint venture partners have agreed to a joint venture development plan which will allow the joint venture to maintain its substantial acreage position. Plans currently call for drilling 70 wells in 2011, 120 wells in 2012 and 140 wells in 2013.

*Petrohawk Energy  HK Petrohawk Energy ( HK ) –

Petrohawk has come out and stated they are active in the Eagle Ford Shale.  Petrohawk operated three rigs in Hawkville Field and five rigs in Black Hawk during the third quarter during which 19 operated wells and 2 non-operated wells were drilled. The total number of Company operated wells drilled in the Eagle Ford Shale to date is 75, with 52 located in Hawkville Field, 21 located in Black Hawk and two located in Red Hawk.In much the same manner as development in the Haynesville Shale, reservoir optimization methods, related to completion and production practices, are being utilized in the Eagle Ford Shale, and completion results from both Hawkville Field and Black Hawk significantly improved during the quarter. In Hawkville Field, the ten most recent wells completed have averaged 6.2 Mmcf/d and 240 Bc/d (7.6 Mmcfe/d using a 6:1 ratio and 9.0 Mmcfe/d using a 12:1 ratio) on an average choke size of 19/64″, a notable reduction in choke size over previous wells. Additionally, initial decline rates appear to be more gradual, not only as a result of restricting production, but also higher performance results from of the recent implementation of hybrid completion technology.

Improved well performance has also been experienced in Black Hawk, where the Company has been producing with slightly larger chokes (15/64″) and completing wells with increased proppant volumes and decreased the perforation spacing during completion operations. The average IP rate for the three most recent wells was 3.6 Mcf/d and 1,485 barrels of condensate per day (Bc/d) (13.2 Mmcfe/d using a 6:1 ratio and 22.1 Mmcfe/d using a 12:1 ratio).

Recent results in both of these areas of the Eagle Ford Shale underscore the more precise mapping of a developing core of the Eagle Ford trend. Of over 280,000 net acres controlled by Petrohawk in Hawkville Field and Black Hawk, approximately 60% is in the portion of the gas condensate window that contains approximately 1200 BTU gas, with condensate yields as much as 500 barrels of condensate/Mmcf and an estimated weighted average of approximately 115 barrels of condensate/Mmcf.

*Anadarko Petroleum  (APC)  –

Anadarko acquired more than 80,000 net acres from TXCO in the Maverick Basin for approximately $93 million. The company has increased its position in the Maverick Basin to approximately 280,000 net acres.  Drilling activity continued with four operated rigs and expects to be operating six rigs by the end of the 2nd quarter. During the 1st quarter, the company spud ten operated horizontal wells in the Eagleford Shale and two evaluation wells in the Pearsall Shale. Seven Eagleford wells were completed with test rates ranging up to 3.7 MMcf/d and approximately 640 Bbl/d.

August 2010 Update Eagleford Shale: Anadarko continued to increase its activity levels in the Maverick Basin during the 2nd quarter, spudding 24 wells, and was operating six rigs at the end of the quarter. During this time period, the company realized a 20% improvement in drilling performance relative to the 1st quarter, with an average spud-to-rig-release of 14 days.  The company has been able to build out its infrastructure in line with production.

*Hess (HES)

In terms of unconventional resources, we plan to start drilling in the Eagle Ford Shale in Texas in November.  Let me talk about the Eagle Ford and then I’ll talk a little bit broader about unconventional strategy. So yes we are building and have built a position in the Eagle Ford. We have about 75,000 net acres as we speak under a contract and our plans are to begin drilling in November in the Eagle Ford and if we can get additional acreage, we’ll expand that position further.

2011 Update In the Eagle Ford shale play in South Texas, we acquired about 90,000 net acres in 2010, primarily focused in the condensate window. We have already drilled three wells and results thus far have been encouraging, with good shows and log response. Over the course of the year, we plan to drill an additional 15 wells

*Exxon Mobile  (XOM)

Exxon Mobile is in the Eagle Ford Shale – Turning now to activities in our unconventional resource portfolio, a significant level of drilling activity continues in the US. During the quarter, we supplied the first well on our Birchus Ranch [ph] acreage in the Eagle Ford Shale of South Texas. ExxonMobil holds 50,000 acres in its emerging shale gas play.

*Forest Oil Corporation (FST) –

Gonzales, Lee, Wilson, Atascosa, and DeWitt Counties, Texas – Eagle Ford ShaleForest is now shooting seismic in Wilson and Gonzales Counties, Texas, and expects to commence drilling with a one rig program in the fourth quarter of 2010 after the results from the seismic shoot are assessed. Additional rigs are expected to be added to the play in 2011.

*SM Energy  (SM)OPERATED EAGLE FORD SHALE

SM Energy has had two (2) operated rigs running on its acreage during the third quarter of 2010. Nine (9) wells were spud and nine (9) wells were completed during the quarter. The Company currently has 31 operated wells completed and turned to sales, 24 of which were completed in 2010. Current gross production from the operated Eagle Ford program is 58.5 MMcf/d of rich gas and 2,000 Bbl/d of condensate, or approximately 70 MMCFE/d. The Company is currently limited in its rich gas production due to temporary infrastructure limitations, and expectations are that an additional 10 MMcf/d will be available to the Company in the fourth quarter of 2010 under its existing downstream arrangement.

As a result of the infrastructure limitation described above, only three (3) of the wells completed and turned to sales were allowed to flow at unrestricted rates. The results from those wells are as follows:

Galvan Ranch 16H (SM 100% WI)- this well was drilled in the northeast corner of the Company’s Galvan Ranch acreage with a 5,600 ft lateral using a 17-stage completion. The 7- and 30-day average production rates were roughly 8.4 MMCFE/d and 7.8 MMCFE/d, respectively. The rich gas production has approximately 1250 BTU/SCF and a condensate yield of roughly 55 barrels of condensate per MMcf of gas produced (“BPM”).

SM Energy completed a two (2) well simultaneous fracture completion (“simul-frac”) in the northern portion of our Galvan Ranch acreage. The wells were drilled on 120 acre spacing. Both used a well design that used a 5,600 ft lateral and a 17-stage completion. The results from these wells were as follows:

Galvan Ranch 10H (SM 100% WI)- the 7- and 30-day average production rates were roughly 8.0 MMCFE/d and 7.3 MMCFE/d, respectively. The rich gas production has approximately 1250 BTU/SCF and a condensate yield of roughly 25 BPM.

Galvan Ranch 14H (SM 100% WI)- the 7- and 30-day average production rates were roughly 7.0 MMCFE/d and 5.9 MMCFE/d, respectively. The rich gas production has approximately 1250 BTU/SCF and a condensate yield of roughly 10 BPM.

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Comments
2 Responses to “Eagle Ford Shale In(Formation)”
  1. Michael Landeck says:

    I am amazed at the volume and versatility of your operations and the potntial of growth inherent.

    Michael

    • a.a.b. says:

      Thank you, Michael. Having access to the proper information in order to present a better understanding of energy & the oil and gas industry in the United States – one of the biggest challenges we presently face – is key. The aim is to inform; And yes, subsequently grow – Hopefully, unite. -allison

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