Eagle Ford Revival: Recent production revival and potential for further development makes Eagle Ford shale a promising prospect

[ceo_energemsier + 1,818]

Recent production revival and potential for further development makes Eagle Ford shale a promising prospect

During 2018 Eagle Ford re-emerged as one of the lucrative destinations for oil and gas companies, according to GlobalData, a leading data and analytics company.

The company’s latest market analysis report: ‘Eagle Ford Shale in the US, 2019 – Oil and Gas Shale Market Analysis and Outlook to 2023’ reveals that the shale play has reverted a production decline and leading operators continue to increase the scale of their operations. There are still some sections within the Eagle Ford shale play which are underdeveloped, especially in the northern part comprising the Burleson and Brazos counties and some companies are also assessing the overlying Austin Chalk formation.

Eagle Ford shale constitutes of a sedimentary shale rock formation in the Texas region that is considered as one of the most profitable formations for exploration and production activities in the US. The major counties for prolific crude oil and condensate production in the Eagle Ford play include Karnes, De Witt, La Salle, Dimmit, and Gonzales. The Eagle Ford play also constitutes largely of condensates and dry gas resources. The major producing counties for natural gas include Webb, Karnes, De Witt, Dimmit, and La Salle.

Adrian Lara, Senior Oil & Gas Analyst at GlobalData, comments: “Eagle Fords definitely remains a sound investment for oil and gas operators. During the last years the play has made a slow but sure comeback but this performance is at times not as noticeable because it neighbours the super attractive Permian Basin. Still, the well economics of the play are robust with current commodity prices and operators are starting to assess areas outside the core zone of the play, moving out from the so-called Karnes Trough.

“Also of relevance is that some operators are re-assessing the production upside of targeting several benches such as the overlying Austin Chalk formation. The recent M&A activity also confirms how operators try to increase their operations in the Eagle Ford; this was in fact a main driver in Chesapeake Energy’s acquisition of WildHorse Resource Development. Eagle Ford won’t become the engine of USL48 unconventional production but it still has growth potential.”

The location of the play allows for better oil and natural gas pricing in comparison to Permian output with proximity to major hydrocarbon processing facilities and export terminals on the Gulf Coast. This, along with sufficiently developed midstream infrastructure, is an important aspect in the enduring attractiveness of Eagle Ford for oil and gas companies.

GlobalData identifies companies such as EOG Resources Inc., Chesapeake Energy Corporation, Marathon Oil Corporation, ConocoPhillips and Noble Energy as among the leading producers in the Eagle Ford shale in 2018.

 

[ceo_energemsier + 1,818]

Good info to follow

[DanilKa + 443]

And reality check ^

 

[Douglas Buckland + 6,308]

I think I’ll ignore the cheerleading and stick with reality.

[ceo_energemsier + 1,818]

Oil producers, experts say Eagle Ford is weathering volatility better than most oil fields

 

 

https://www.expressnews.com/business/eagle-ford-energy/article/Oil-producers-experts-say-Eagle-Ford-is-14470238.php

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ConocoPhillips Driving Data Analytics, Refracs In The Eagle Ford Shale

ConocoPhillips executive Erec Isaacson offered the audience at DUG Eagle Ford several lessons the company has learned during its decade of operating in the basin.

 

 

Robust data analytics, thoughtful completions evolution and other lessons learned after a decade operating in the Eagle Ford shale of South Texas has supermajor ConocoPhillips confident it has unlocked over one billion additional barrels of oil equivalent across its position since 2012.
 
The company entered the Eagle Ford in 2009 and currently holds around 200,000 net acres spanning from the updip black oil window and the downdip to the edge of the wet gas window.  At the end of 2018, the operator had more than 1,200 wells and 2,000 miles of pipelines across the area.

Data gathering and analysis across its holdings has paid benefits, according to Erec Isaacson, vice president of ConocoPhillips’ Gulf Coast Business unit.

https://www.hartenergy.com/exclusives/conocophillips-driving-data-analytics-refracs-eagle-ford-shale-183121

https://static.conocophillips.com/files/resources/eagle-ford-investor-field-tour-final-040318.pdf

 

[ceo_energemsier + 1,818]

DUG Eagle Ford: Assets, Efficiency, Costs And Keys To Success

The first day of the DUG Eagle Ford conference and exhibition wrapped with a progression of topics ranging from spacing and efficiency to deals and capital. What will day two bring?

SAN ANTONIO—Oil and gas executives packed the Henry B. Gonzalez Convention Center in San Antonio on Sept 25 for a closer look at the region at the annual DUG Eagle Ford conference and exhibition.

The afternoon got off to a start with keynote speaker John Brooks, president and CEO of Penn Virginia Corp. Brooks threw out the seemingly magic word in today’s market when he told the audience of more than 1,400 delegates that PennVirginia expects to achieve free cash flow in the fourth quarter of 2019.

PennVirginia has 84,400 net acres and 510 gross locations in the Lower Eagle Ford in Gonzales, Fayette, Lavaca and DeWitt counties. Brooks said it is now running a two-rig program.

He said two areas impact operating costs: artificial lift and saltwater disposal. Penn Virginia has 80% of its wells on gas lift, and it has developed a salt water disposal system that handles 30% to 35% of its water.

He added the Eagle Ford offers lower cost drilling, premium pricing and high margins.

 

The technical panel featured Sean Fitzgerald, Boomtown Oil;  Mark Norville, BlackBrush Oil & Gas; Amit Sharma, Halliburton; and Rocky Seale, Baker Hughes.

Fitzgerald said operators are looking at adjusting spacing and approaches to defend parent wells, a theme that was familiar throughout the day.

Venado Oil & Gas is a private equity-backed operator focused on liquids-rich assets in the Eagle Ford, said Branden Kennedy, CFO, who followed the technical roundtable. There has been a monumental shift from the old quick-flip model to one built for duration. “We don’t have a clock,” he said.

Venado is the new model of a private equity company because it is business- and process-driven, Kennedy said. It’s a long duration model that is focused on cash margin and returns. He said the company wants a predictable, repeatable, scalable, dependable and profitable business.

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Editor’s note: Hear more about Venado Oil & Gas in Branden Kennedy’s upcoming
one-on-one video interview with Hart Energy’s Jessica Morales.

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“Our neck of the woods in the Eagle Ford dry gas window competes head to head with other sources,” said panelists on the operator roundtable. “We have a leg up on everyone else with our South Texas location.”

The panel featured Bill Deupree, Escondido Resources; Kirk Spilman, Pursuit Oil & Gas; and Eric McCrady, Sundance Energy.

On the oil side, it’s capital availability rather than price that is dictating activity levels, they said.

McCrady said Sundance sees changes in well productivity in its acquired assets, as its current completion designs are more intensive than what the prior operator used. In the dry gas areas, Deupree said Escondido is concerned with keeping its wells unloaded.

 

Despite a bad overall A&D market, the Eagle Ford has several positives: maturity; advantages in pricing; shallower depths; and low production costs, according to analysts on the A&D Roundtable. Bryce Erickson, Mercer Capital; Robert Urquhart, Scotiabank; and Chuck Yates, Kayne Anderson made up the roundtable.

But there are very big headwinds. With the limited capital that’s out there, A&D is competing with dividends, stock buybacks and other uses, the panelists noted. Investor sentiment is that oil prices are capped at $60 per barrel (bbl) and companies have to deliver on standard business metrics.

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The panelists also pointed to the industry’s “red and green” problem. There are companies that have been in the red and have not delivered good returns in the past. Additionally, oil and gas is not perceived as part of the green revolution, with climate change concerns driving some investors away.

Charles Cusack

In the private operators panel, Charles Cusack, president and CEO of Recoil Resources, which is backed by Energy Trust Partners, said the company has acquired 70,000 net acres updip to the Karnes Trough, largely in Wilson County. It currently produces 4,000 gross bbl/d of oil from 99 wells.

Recoil is designing its completions with 2,000 lbs/ft of proppant and 2,000 gal/ft of water. It has nine producing wells in Wilson County with modern completions and three wells without completions.

John Roby

On the same panel, Teal Natural Resources CEO John Roby said his company is currently producing 6,925 net boe/d. It has 21,000 net acres in two main areas, Kalo and Shiner. NGP and Pearl are the backers.

Roby said 2018 was a year with a variety of spacing approaches by operators. Lateral placement is key, he added. Teal uses advanced seismic processing and mapping techniques such as acoustic impedance and coherency to accurately place laterals in two unique lower Eagle Ford benches.

A Tale of Spacing, Strengthening And Change

Erec Isaacson

Erec Isaacson, vice president of the Gulf Coast Business Unit at ConocoPhillips, opened the morning session by discussing capitalizing on complexity through technology and innovation. He said ConocoPhillips has 200,000 net acres and 1,200 Eagle Ford wells online, and has produced 375 million barrels of oil equivalent (boe) net from the play in the past nine years. But they’re nowhere close to being finished.

“We still have thousands of wells left to drill,” he told the audience.

He said the company’s SRV pilot in De Witt County, Texas, indicated recovery factors that could be further improved. There were many more hydraulic fractures than expected and many of these were not adequately propped, according to Isaacson.

So how did he propose improving recovery? He pointed to optimization of spacing and stacking as keys to maximizing value creation. He added ConocoPhillips is also refracturing early Eagle Ford wells with newer completion designs.

Isaacson said there’s been a 60% average increase in resource from refracs. Additionally, the company is additionally using refracs to defend parent wells.

Bernadette Johnson, vice president of market intelligence at Enverus, took to the stage to discuss the economics of the Eagle Ford. She said Eagle Ford rig counts have been more resilient than other plays. She also said drill times in the Eagle Ford have continued to trend down as operators have become more efficient.

The western part of the Eagle Ford had seen well spacing decreased until 2016, but recently completed wells have wider spacing, largely due to a lack of locations left in the Karnes Trough area, Johnson said. She added that 80% of wells drilled in the west of the basin today are child wells and their performance remain strong.

Crude oil breakevens in the Eagle Ford offer some of the best economics in the country, she said. The Karnes Trough has sub-$40/bbl breakevens and, in some cases, sub-$30/bbl.

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The Eagle Ford is a quality place to make money, said Steve Adam, executive vice president and COO of SilverBow Resources Inc. SilverBow was focused on gas, but it has been successful in growing its liquids production by 200%, he said.

The pure play Eagle Ford operator that has the ability to allocate capital across a diversified commodity base and the access to premium Gulf Coast markets. It is focused on margins and returns, Adam said.

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Editor's note: Look for Steve Adam’s upcoming video interview with
Hart Energy’s Jessica Morales next week on HartEnergy.com.

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Industry analyst Tom Petrie, Petrie Partners, said the oil market has become remarkably sanguine as seen by the muted price response to the recent attack on Saudi Arabia’s infrastructure. Maybe, in his opinion, too sanguine.

He added there is still a lot to be done to tie U.S. production to the export markets, both for oil and gas. But, he said, South Texas is well positioned for the growing export trade. The emerging U.S. role as a swing producer for both oil and gas is ever more evident.

Well Interference Forum

A day earlier, speakers at the Well Interference Forum discussed spacing and stacking. Mike Kelley, an analyst for Seaport Global Securities, said Wall Street now better understands well spacing. He said investors know that child well economics must be dialed back and that upscale spacing is necessary. They won’t trust IP rates and well sequencings matter to them.

Peter Duncan

Meanwhile, MicroSeismic CEO Peter Duncan told the audience at the forum that “Frac hits are a fact of life.” He said the challenge for operators is to anticipate the problem and plan effective mitigation strategies.

Bill Von Gonten Jr., president of W.D. Von Gonten & Co. Petroleum Engineering Laboratories, said operators need accurate, high-res frac models that are dynamic. “There will always be interference between parent and child wells,” he said. The key is how can we minimize that interference?

Ellen Scott

Ellen Scott, engineering advisor for Deep Imaging, explained a new type of fluid tracking technology that creates an electromagnetic (EM) field at the reservoir level. Changes to the EM field can be used to map well interference effects, she said.

Jason Baihly, commercial and risk manager of integrated services management for Schlumberger, said parent wells tend to outperform child wells. Operators try strategies including bigger jobs, larger spacing, or pressuring up parent wells. Another solution is concentrating frac energy around the child well, he said.

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Eagle Ford Soars On

The Eagle Ford Shale play continues to deliver a steady supply of resources.

The discovery of the Hawkville Field in October 2008 kicked off a drilling and development boom the likes of which South Texas had not seen before. The discovery well—the STS-241 #1H, drilled by Petrohawk Energy Corp. in LaSalle County—would be the first of many horizontal wells in the Eagle Ford Shale play. In the 11 years since that initial discovery, the play is now considered one of the most mature unconventional plays, with more than 25,000 horizontal wells spudded, according to Drillinginfo.

In an exclusive report provided to E&P, Drillinginfo projects a 4% increase in production guidance from the Eagle Ford, forecasting third-quarter 2019 oil and gas production of 1.43 MMbbl/d and 194 MMcm/d (6.87 Bcf/d), respectively. For year-end 2020, oil and gas projected production is 1.49 MMbbl/d and 193 MMcm/d (6.82 Bcf/d), according to the report.

 

 

 

 

[Boat + 1,324]

After all these years frackers are still working out the efficiencies of optimal spacing. Apparently a tough challenge. It’s interesting how refracking old fracks sounds profitable. 

A few years back I read about old wells that had the potential to be fracked with today’s technology that numbered in the 10’s of thousands. I wonder if that idea is still relevant and viable. Viable maybe at a higher price point?

Ceo, thanks for all your posts.