Forest Oil (FST) reported the results on three recent horizontal wells drilled into the Eagle Ford Shale in Texas, where the company has 40,000 net acres under lease.
Forest Oil said that the wells averaged maximum production of 787 barrels of oil equivalent (BOE) per day during a 24 hour period, with 96% of the production composed of oil.
Forest Oil has moved a second rig to the field and reports that the average cost to drill and complete a well is now under $6 million per well. The company estimates that Eagle Ford Shale wells will have an estimated ultimate recovery of 300,000 BOE and earn a return of 25% at a West Texas Intermediate price of $80 per barrel.
Forest Oil has reduced its overall capital spending for 2012 and now estimates that the company will spend between $190 million and $210 million in the second half of the year. The company spent $435 million in the first half of 2012.