Eagle Ford Shale

Talisman Energy Enters Eagle Ford Shale Play

Talisman Energy (TLM) announced a position in the Eagle Ford Shale through a purchase of 37,000 net acres. The acreage is in the liquids window of the play, and the acreage currently has 2000 barrels oil equivalent per day of production.

Talisman Energy paid $360 million for the acreage, and plans on operating 1 rig, drilling 7 wells starting in June 2010. Talisman Energy will spend up to $50 million per year over the next 3 years to hold its acreage, and believes that the economics of the Eagle Ford Shale work with a natural gas price below $4.00.

During the first quarter of 2010 earnings call, the company made additional commentary on the newly acquired Eagle Ford Shale acreage.

“Make an entry into another top tier shale play acquiring a moderate entry position of just under 40,000 acres, much of which is in the heart of the liquids rich transition window in the Eagle Ford. We have been evaluating the Eagle Ford for sometime and we are confident that it’s emerging as a top tier play.”

“In terms of breakevens, we and others are clearly starting to see the Eagle Ford rapidly emerge as one of the leading return shale plays in North America. We are very confident from the world results that we have seen on this acreage, just as a reminder it have been a six horizontal wells on the acreage that we have drilled already. We are very confident as we see all of the characteristics for this to be a sub $4 breakeven play within our portfolio.”

“It’s an entry position, the 37,000 acres on their own would sort of support business that could go up and ramp up over time to sort of circle 300 to 350 million standard cubic feet a day.”

“In the Eagle Ford, we would need to spend roughly a minimum of $30 million to $50 million per year for the next 2 to 3 years to retain the acreage and that’s clearly a very, very management land expiry profile for us to deal with and is very similar as I say to the other acreages and positions that we have. In terms of royalty rates, the sort of average royalty that we are seeing is roughly 18%.”

Source: Seeking Alpha

St. Mary Land and Exploration - First Quarter of 2010 - Eagle Ford Shale Update

St. Mary Land and Exploration Company (SM) issued an operational update on its activities in the Eagle Ford Shale in Texas. The company has drilled 10 more wells in the Eagle Ford Shale since its last update on 2/23/2010, bringing its total operated wells to 19.

St. Mary Land and Exploration Company has completed 7 wells, and has 3 more waiting on completion. The company said that the completed wells averaged initial production rates of 2.5 million cubic feet per day, as the wells were put on constrained production until the best way to optimize production was determined.

St. Mary Land and Exploration Company said that its condensate yield per million cubic feet of natural gas was 40-60 barrels on its acreage in the Galvan Ranch area. The company also said that its natural gas liquids yield was higher than expected.

St. Mary Land and Exploration Company estimates that the cost to drill and complete wells in the Eagle Ford Shale will range between $5.5-6.0 million. The company will operate 2 rigs here during 2010.

St. Mary Land and Exploration Company has increased its capital budget for 2010 in the Eagle Ford Shale from $216 to $284 million.

EOG Resources Reports Well Completion In Eagle Ford Shale

EOG Resources (EOG) issued an operational update on its activities in various unconventional shale basins in North America. The company provided new information on its activities in the Eagle Ford Shale in Texas.

EOG Resources has 505,000 net acres under lease in the Eagle Ford Shale and reported the completion of the Harper Unit #4H well in Karnes County, Texas. The well has an initial production rate of 602 barrels of oil per day, and 650,000 cubic feet per day of natural gas.

The Harper Unit #4H was the company’s 17th well into the Eagle Ford Shale. The company plans to operate a 6 rig program in 2010.