Barnett Shale

Pioneer Natural Resources Updates Barnett Shale Operations

Pioneer Natural Resources Company (NYSE:PXD) issued an operations update on its activities in the Barnett Shale in north Texas.  The company has 48,000 net acres and is continuing to add to its position in the Barnett Shale Combo play area where wells have a high liquids content. 

Pioneer Natural Resources estimates that it has 500 drilling locations on its acreage and is modeling well costs of $2.8 million, and a gross estimated ultimate recovery (EUR) of 320,000 barrels oil equivalent (BOE) per well.  The internal rate of return is estimated at 45% before tax.

Pioneer Natural Resources is operating one rig in the Barnett Shale and is conducting a seismic program that will eventually cover 150 square miles

Pioneer Natural Resources - Barnett Shale Update

Pioneer Natural Resources (PXD) reported earnings for the second quarter of 2010 and issued an operations update on its activities in the Barnett Shale. The company is acquiring acreage in the Barnett Shale, and now has 43,000 net acres under lease in the Barnett Shale combo area to the north of the traditional play.

Pioneer Natural Resources estimates that it has 400 drilling locations on its acreage and will spud the first well in August 2010. The company expects to drill eight wells by the end of 2010, and will have four rigs operating in the Barnett Shale combo play in 2011.

Pioneer Natural Resources estimates that wells here will earn a pretax rate of return of 45%. This pretax rate of return assumes that completed well costs will be $2.8 million, and have an estimated ultimate recovery (EUR) of 320,000 barrels oil equivalent per well.

EOG Resources - Barnett Shale - Q1 2010 Conference Call Comments

EOG Resources (EOG) reported earnings for the first quarter of 2010, and held an earnings conference call to discuss the results. The company made comments on its activities in the Barnett Shale in Texas, on what the company calls the Barnett Combo play.

EOG Resources has recently drilled a productive horizontal well on a 25,000 acre plot that the company had designated for vertical drilling. The well was so good that the company may convert this area to horizontal drilling.

“In the Barnett Combo play where we've completed our best producer to date. The Settle B #1H well began producing at a rate of 1,852 barrels of oil per day, with 3.7 million cubic feet a day of liquids rich gas and we yield reserves considerably higher than our model horizontal well. This well was significant because it was drilled in the eastern portion of the play in the 25,000 acres we had designated for vertical drilling.”

“And this horizontal well, the Settle well has turned out much, much better than, frankly, than any horizontal combo well we've drilled so far; and it's kind of startling to us.”

“The rock quality in this 25,000-acre area is the best in the play, which is why vertical wells are economic. However, if we can replicate the Settle results with additional horizontal wells, and these 25,000 acres can be exploited at a higher ROR and reserve recovery than we projected for vertical wells, we'll soon be drilling additional horizontals here and we'll apprise you of the results later this year.”

“In addition to the Settle well, we've also completed a number of horizontal wells in the Barnett combo play. The Alamo #1H, #2H and #3H wells were drilled on 55-acre spacing in Montague County. The wells began producing at a combined rate of over 900 barrels of oil per day, with 2.4 million cubic feet a day, and we have 97% working interest in these wells.”

“On the horizontals, we're just going to see if we can replicate the Settle results. The horizontal wells are going to cost us about $3.5 million a well. The verticals would be, I believe, it's about $2.1 million a well.”

Source: Seeking Alpha