Eagle Ford Shale

Upcoming Energy Sector Earnings Season

Here’s an interesting article on the Motley Fool blog that discusses the upcoming earnings season in the Energy Sector.  Second quarter earnings season will be an important one to watch due to the recent weakness in oil prices:

Gearing Up For Earnings Season

Newfield Exploration Company Updates Eagle Ford Shale Activity

Newfield Exploration Company (NFX) has 230,000 net acres under lease in the Maverick Basin in South Texas and started testing a well design that incorporated super extended laterals in early 2012.

Newfield Exploration Company has drilled three successful wells in Dimmit County that used laterals of 7,500 feet and reported initial gross production rates of 750 to 1,020 barrels of oil equivalent (BOE) per day from these wells.  The company has become more efficient at drilling these wells and reported that a recent super extended lateral well was drilled and cased in 12 days.

Newfield Exploration Company estimates that wells drilled with super extended laterals into the Eagle Ford Shale will have an estimated ultimate recovery (EUR) of 500,000 barrels. The company plans to drill six more of these wells in 2012 and estimates that these wells can be drilled at a gross cost of $8 million each.

Forest Oil - Eagle Ford Shale Update

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.