The Eagle Ford may be the greatest oil discovery in the U.S., and maybe the world. Its geology consists of three windows.
Figure 13: The three windows comprising the Eagle Ford.
|Image: EOG Resources|
In the illustration above, the green area is referred to as the oil window, which has resource that is predominantly oil. The pink area is referred to as the wet gas window. This window produces a high percentage of NGLs/condensate. In orange is the gas window and it's predominantly gas, which is not considered economical at this time.
Royal Dutch Shell has 250,000 net acres in this play. Its 106,000 net acres on Harrison Ranch in Dimmit County is the single largest leasehold in the Eagle Ford. This acreage is located in the oil window. It started accumulating acres in 2008.
BHP Billiton purchased PetroHawk for $12.1 billion to get into the Eagle Ford. In return, it acquired 1 million acres of shale and production of 158,000 BOE/D. BHP has 332,000 net acres in the Eagle Ford. Half of this acreage is in the liquids portion of the play. Its Black Hawk portion of this play is in the counties of Karnes, DeWitt and Gonzales. This is located in the Eagle Ford sweet spot.
BP (NYSE:BP) has 450,000 net acres in the Eagle Ford. Its acreage is in the counties of Dimmit, Webb, La Salle and Duval. The Webb County acreage is mostly prospective for gas and is not currently being worked, but its liquids-rich acreage to the north is being drilled.
ConocoPhillips has 220,000 net acres in the Eagle Ford. Its acreage is located in the counties of Karnes, DeWitt, Lavaca, Colorado, Austin, Bee, Fayette and Live Oak. Production in the Eagle Ford exceeded 50,000 BOE/D in December 2011. Conoco estimates production will increase to 100,000 BOE/D by the end of 2012.
Statoil (NYSE:STO) formed a joint venture (JV) with Talisman Energy (NYSE:TLM) to purchase 97,000 net acres in the Eagle Ford back in October 2010. This purchase was for $1.325 billion or $13,600 per acre. Statoil also paid $180 million or $10,000 per acre for a 50% interest in 37,000 net acres held by Talisman. This JV totaled 134,000 net acres. This was not a bad deal for Statoil given that the acreage covers DeWitt, Karnes, La Salle, Live Oak and McMullen counties. Statoil and Talisman purchased an additional 15,400 net acres in the counties of La Salle and Dimmit. The purchase price was $225 million or $14,600 per acre.
Anadarko has more than 400,000 gross acres or 200,000 net acres in the Eagle Ford. This Maverick Basin acreage is in the counties of Maverick, Dimmit, La Salle and Webb. Anadarko has stated EURs to average 450 MBOE. Its JV with Korea National Oil Corp. will provide $1.6 billion in capital over the next three years to develop the play.
Apache has over 450,000 acres prospective for the Eagle Ford, and 400,000 of those acres are through a JV with EV Energy. Its acreage is mostly in gas dominated areas, and in the counties of Austin, Brazos, Burleson, Fayette, Grimes, Lee and Washington.
EOG Resources may be the best positioned Eagle Ford player, but it took a huge chance in acquiring acreage before anyone knew for certain whether liquids extraction was economic or not. Not only is a large portion of its 647,000 net acres in liquids-rich windows, it has also produced many of the highest IP rates to date. Its average production is 78% oil and 10% NGLs. Only 49,000 net acres are in the gas window. EOG is present in the counties of Atascosa, Bee, DeWitt, Duval, Gonzales, Karnes, LaSalle, McMullen, Webb and Wilson. More recent wells have an IP rate exceeding 3,000 BO/D plus NGLs and gas. There are 65 to 90 acres in down spacing progress, and well costs are $5.5 million with a lateral of 4,000 feet.
Chesapeake has over 600,000 net acres in the Eagle Ford. It brought CNOOC (NYSE:CEO) into this play at a 33% working interest with the option to buy into additional acres, for $2.16 billion or $10,800 per acre. Chesapeake began accumulating acreage in August 2009. It acquired most of its acreage in the oil window, but more to the south and not in what has been the sweet spot of the play (Gonzales County).
Hess has 86,000 net acres in the Eagle Ford and 51,000 gross acres in the counties of LaSalle, Frio and Dimmit. The company has 25,000 gross acres in Lavaca and Colorado counties, 39,000 gross acres in DeWitt and Lavaca counties and 12,000 gross acres in Fayette, Gonzales and Lavaca counties. This acreage is a JV with ZaZa Energy Corp (Nasdaq:ZAZA) for which ZaZa operates and has a 10% working interest.
Pioneer Natural Resources drilled 111 wells in 2011 at a cost of between $7 million and $8 million. Pioneer will drill 125 wells in 2012 running 12 rigs. In the third quarter of 2012, it drilled 35 wells. It has a JV with Reliance Industries. Pioneer sold 45% of its 212,000 acres in exchange for $1.15 billion.
Cabot Oil and Gas has 61,000 net acres in the Eagle Ford but one-third of it is operated by EOG Resources. Cabot is running one rig in 2012. It has 38,000 net acres in the Buckhorn (Frio, Atascosa and La Salle counties). IP rates have averaged around 697 BOE/D and EURs average 400 MBOE. EUR ranges are 380 to 550 MBOE. Laterals have averaged from 3,200 to 6,500 feet in the Buckhorn. Its Presidio (18,000 gross acres in Atascosa, Wilson and Karnes counties) acreage has had an IP rate average of 774 BOE/D, and an EUR range of 300 to 500 MBOE. Lateral lengths have averaged from 5,100 to 5,800 feet.
Plains Exploration and Production has 60,000 net acres in the Eagle Ford, and has seven to nine rigs running in 2012. The company has a centralized position located in the counties of Wilson and Karnes.
Newfield acquired 300,000 net acres in the Maverick Basin with its purchase of TXCO Resources. This acquisition was jointly made in January 2010 with Anadarko Petroleum. Its acreage is located in the counties of Dimmit, Maverick and Zavala. It now has 335,000 net acres. EURs of 300 MBOE are expected with average well costs of $6.6 million.
SM Energy has 149,000 net operated and 46,000 net non-operated acres in the Eagle Ford. Its operated Webb acreage suggests well spacing is between 72 and 143 acres. Its non-operated acreage will be carried for three to four years. Its most northern acreage in Webb County is its best with 58% liquids, which is 48,287 net acres or approximately one-third of its operated play. Well costs run between $6.8 million and $7.7 million with the lowest at the north. Its non-operated acreage is in the counties of Dimmit, Maverick and Webb.
Rosetta Resources has 65,000 net acres in the Eagle Ford and 50,000 are in liquids-rich windows. Its acreage is located in the counties of Dimmit, Duval, Gonzales, La Salle and Webb. The IP rates for Dimmit County have been 1,990 BOE/E (850 BO/D) and the rates in Gonzales County are 3,033 BOE/D (2,450 BO/D). Well spacing has been tested down from 65 acres and 93% of capex in 2012 will be spent on the Eagle Ford.
Forest Oil has 105,000 net acres prospective in the Eagle Ford. Its acreage is located in the counties of DeWitt, Gonzales, Lee and Wilson. The company has two rigs running and its best well to date was in Gonzales County. The Gonzales IP rate was 1,945 BO/D and 1931 MCF/D. Forest has great Eagle Ford Acreage.
Swift Energy has acreage in the counties of Webb, La Salle and McMullen. It has 78,000 net acres and is currently using laterals of 6,000 feet and spacing of 80 acres. There's an estimated resource potential of 950 MBOE. There are four to five rigs running in the Eagle Ford, including 12 operated wells in the third quarter of 2012.
PetroQuest has 2,300 net acres in La Salle and Dimmit counties. It plans two or three wells in 2012. Wells have a high percentage of oil, but IP rates have not been as good in the 263 to 725 BOE/D.
Carrizo has 41,000 net acres in the Eagle Ford with four rigs currently drilling. It has a JV with GAIL (India) for 20% of 20,200 net acres plus eight producing wells for $63.7 million and a $31.4 million carry. Well spacing is currently at 115 acres and EURs of 400 MBOE, and there are laterals of 5,000 feet with 18 stages that have well costs of $7 million to $8 million.
Clayton Williams has 177,000 net acres in Giddings prospective for the Austin Chalk and Eagle Ford. The Eagle Ford is not as good in this area, but is a secondary target. In Wilson County, well costs are $7.5 million and gross reserves are 300 to 400 MBOE.
Magnum Hunter has 24,000 net acres in the Eagle Ford. Its acreage is located in the counties of Fayette, Gonzales and Lavaca. In Gonzales, there are 18,712 acres, 2,065 net acres in Fayette and Lee and 3,223 net acres in Atascosa counties. Its wells in Gonzales and Lavaca counties have been great, as it is in the Eagle Ford sweet spot. IP rates have varied from 605 BOE/D (nine to 11 stages) to 2,044 BOE/D (21 to 22 stages), and lateral lengths are from 4,365 to 6,708 feet.
GeoResources has 24,000 net acres in the Eagle Ford. This is mostly in Fayette, but has a much smaller area in Gonzales. Ten wells have been drilled, and in 2012 20 to 24 wells will be spud. GeoResources has had 30-day IP rates of 369 to 636 BOE/D. It is important to remember that this acreage is just to the northeast of Magnum Hunter and EOG Resources. EURs are expected to run between 325 and 500 MBOE at a spacing of 150 acres. It has an additional 30,000 net acres in Giddings which was just purchased along with 170,000 acres in the Brookeland area. Its acreage in Giddings is located in Fayette, Washington and Grimes counties. A recent well result had a 30-day IP result of 326 BO/D.
Comstock Resources has 28,000 net acres in the Eagle Ford, and it has acreage in the counties of Atascosa, Karnes, La Salle and McMullen. Comstock expects EURs of 400 MBOE and well spacing of 100 acres. In 2011, Comstock drilled 19.2 net wells with an average IP rate of 820 BOE/D.
Sanchez Energy (NYSE:SN) has 91,000 net acres in the Eagle Ford. It is prospective of Gonzales, Fayette, Lavaca, Zavala, Frio and Atascosa counties. The company plans to spend $126 million to $144 million on its 2012 drilling program. It expects to drill 16.5 net Eagle Ford wells with seven already, and the remainder to be completed in the fourth quarter of 2012. The spacing is expected to be 120 acres, but there could be further down spacing. Its Gonzales County acreage is by far its best. EUR expectations are 600 MBOE and well costs will average $8.5 million. Its Fayette/Lavaca acreage has EURs of 450 MBOE and well costs of $7.5 million. This company's Zavala and Frio acreage has EURs of 350 MBOE and well costs of $6 million.
Goodrich Petroleum has over 40,000 net acres in the Eagle Ford and has acreage in La Salle and Frio counties. It has had some good completions, with IP rates averaging 907 BOE/D. It has been changing lateral lengths to test the play and is using 21 to 29 stages.
Matador Resources (NYSE:MTDR) has 28,906 net acres in the Eagle Ford, and 84% of the 2012 capex will be spent here. Matador will drill 27.6 net wells in the Eagle Ford and Austin Chalk this year. There is 85% of its Eagle Ford acreage in the liquids windows. In the counties of Gonzales, Wilson, Karnes and Atascosa there are 4,874 net acres. This acreage is Matador's best in the Eagle Ford.
ZaZa Energy has 123,000 gross acres in the Eagle Ford, but only 12,300 net acres. ZaZa is the operator of this acreage which is a JV with Hess. It also has 63,000 net Eaglebine acres.
Abraxas has 12,177 gross acres as part of the Blue Eagle JV. This acreage is in the counties of Atascosa, DeWitt, Lavaca and McMullen. Abraxas has a 41% working interest. It recently announced it has an agreement in place to sell a 25% working interest in the Eagle Ford to provide capital for the purpose of developing its other plays.
Evolution Petroleum has 18,000 net acres in the Giddings Field. Targeted reservoirs are between 9,000 and 13,000 feet and are generally completed with laterals of 4,000 feet. Re-entries cost $1 million to $1.7 million and new horizontals are running $2 million to $3 million. The Giddings field is prospective in the Eagle Ford, but the primary pay zone is the Austin Chalk.
Penn Virginia has 23,000 net acres in the Eagle Ford. Of the $300 million to $325 million in the 2012 capex, 85% will be spent on the Eagle Ford. It is in the Eagle Ford sweet spot, with acreage in Gonzales and Lavaca counties. It has 30-day IP rates of between 675 and 1,025 BOE/D. The company expects EURs in the 400 MBOE range, and well costs are approximately $8 million. It is currently doing laterals of 4,000 feet with 15 to 16 stages. There have been very good results by EOG Resources and Magnum Hunter in this area.
Gastar has 19,574 net acres in Leon and Robertson counties of the Eagle Ford. Test wells have not been as good as hoped, but further de-risking by Devon and EOG Resources should give an idea of how this area will produce.
Crimson Exploration (Nasdaq:CXPO) has 8,160 net acres in the Eagle Ford and 17,000 net acres in the horizontal Woodbine. The company has currently down spaced its Eagle Ford acreage to 160 acres but believes it could get to 80 acres. Of the 2012 capex, 38% will be spent on the Eagle Ford. It has 6,550 net acres in Zavala and Dimmit counties, with 1,050 net acres located in Karnes County and 560 net acres in Bee County.
Texon Petroleum has 5,900 net Eagle Ford acres, and 75% of its reserves are from here. An estimated 86% of production will be from liquids. It has three other oily pay zones.
US Energy Corp. has a 30% working interest in Crimson Exploration's Eagle Ford acreage. This is 4,136 net acres in Zavala and Dimmit counties.
Enerjex Resources (OTC:ENRJ) has 5,500 acres in Atascosa and Frio counties. It has seven wells producing at a depth of 4,500 feet.
Global Petroleum (OTC:GBPOF) has 1,651 acres in the Eagle Ford as part of a participation agreement with Texon Petroleum.
Lucas Energy (NYSEAMEX:LEI) has 9,700 net Eagle Ford/Eaglebine acres. Of those, 5,144 net acres are in the Eagle Ford's Atascosa, Gonzales, Karnes and Wilson counties. The company is looking to divest its Eagle Ford assets and focus on the Austin Chalk.
Eagle Ford Oil and Gas (OTC:ECCE) has a 38.75% working interest in 2,315 acres in Lee County. It also has a 1% interest in 2,400 acres in Live Oak County. It has had very limited success.
Jadela Oil Corp. (CVE:C.JOC) has 7,989 net acres in Maverick County just west of Newfield's Comanche Ranch. It has the right to acquire an additional 2,325 net acres.
The Eagle Ford is a very complex and lucrative play on liquids. It is very different from the Williston Basin, as production can change significantly in a very short distance. Given how early we are in its development, it is difficult to know where the sweet spots are. What we do know is the oil window is comparatively shallow. This decreases well costs by $500,000 when compared to the condensate window. This oil window is not as productive as the condensate window, but costs help to level this out some.
Figure 14: Map showing different windows in the Eagle Ford in Texas.
|Image: Energy Information Administration|
The picture above shows the shallowest portion (less than 4,000 feet) of the Eagle Ford being in the oil window of Maverick and Zavala counties. This area is by far the lease expensive to drill and complete. As we move to the northeast, the oil window starts at about 6,000 feet, with the best production in the oil window coming from Gonzales County. Look at the area in the southeastern portion of this county where a cluster of wells have been drilled (EOG Resources, Penn Virginia and Magnum Hunter are active here). The San Marcos arch runs through Gonzales County, and should provide good results around the structure. These good results in the oil window are also evident in Wilson County. Moving to the condensate window, it is much shallower in Dimmit and Webb counties. This area can be as shallow as much as 6,000 feet but then deepens to 12,000 feet to the south. As with the oil window, the condensate window seems to have the best results near Gonzales County. Lavaca, DeWitt and Karnes counties all have very good results as well. Shale thickness is also an issue as it is consistently 200 feet where the condensate and oil windows meet. This is another reason for the very good results. The dry gas window is the deepest and most costly area to drill. Given the price of gas, it is not economical to drill. Webb (dry gas) and Dimmit (condensate) counties have shale thickness up to 300 feet in areas. Guide To Oil And Gas Plays In North America: Niobrara
InvestingThe oil market is in the midst of another one of its periodic downturns. While these are trying times for the industry, they're also times of opportunity. Those companies with a long-term outlook ...
InvestingEagle Materials will send its dividend payment on July 22 to shareholders of record as of June 20.
InvestingThere are several E&P companies that are putting the majority of capital budgets into single oil and gas plays.
InvestingVanguard Natural Resources (NASDAQ: VNR) has been busy in 2015. The company is acquiring two smaller upstream MLP rivals, Eagle Rock Energy Partners (NASDAQ: EROC) and LRR Energy (NYSE: LRE), ...
InvestingFind out which suppliers generate a large percentage of their revenues from the Ford Motor Company and what makes their relationship unique.
InvestingFord reports earnings on the morning of January 26th, here are some things to look for.
InvestingInvestors were left with little in the tank after Ford's Q4 earnings release this morning.
InvestingTrump, self-driving cars, and a dig at a competitor.