Murphy Oil (MUR) reported earnings for the second quarter of 2010 ending 6/30/2010, and discussed the company’s operations in the Eagle Ford Shale in Texas. The company is in the process of drilling its ninth well in the Eagle Ford Shale, and will increase its operated rig count to three during the third quarter of 2010.
“Onshore in the U.S., our operations in the Eagle Ford shale in South Texas are moving ahead nicely. We are continuing to add to our land position now well over 200,000 net acres.”
“Also in the quarter, we completed two wells in the dry gas portion of the play, both wells in La Salle County. In Oasis Minerals M # 1 well was completed in May and came in at a rate of 7.6 million cubic feet per day over 72 barrel flow period. The well was completed with a 3,392 foot lateral and 13 frac stages.”
“The Crescent C #1 well was drilled to a total depth of 16,550 feet with a 3,360 foot lateral section and 15 frac stages and that well had an IP rate of 13.9 million cubic feet a day. Overall the results have been encouraging and we will add a third rig very soon and accelerate drilling in the oil prone areas of the play.”
“We’re probably likely to have five rigs running in the Eagle Ford through next year. So a pretty much stepped up program for us.”
“We’ve been spending more money on the wells because we’re drilling them straight for the most part doing some quarrying, a lot of logging and then turning them horizontal. So our well costs are kind of the in the $11 million plus, to drill and to frac them."
"I expect that our costs will come down for drilling from about $5.5 milion now on average to something less than $4 million, and I expect our fracturing costs which are kind of the in the $4.5 million and $5.5 million range to get down below $4 million.”
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