Eagle Ford Shale

Chesapeake Energy Updates Eagle Ford Shale Operations

Chesapeake Energy (CHK) reported an update on its operations in the Eagle Ford Shale during the fourth quarter of 2011. 

Chesapeake Energy reported average daily production of 17,700 barrels of oil equivalent (BOE) per day in the final quarter of 2011.  This was a 60% sequential increase and a 370% increase on a year over year basis. The company is currently producing 45,500 gross BOE per day and 22,600 net BOE per day from the Eagle Ford Shale.

Chesapeake Energy said that the company’s production mix was approximately 50% crude oil, 20% natural gas liquids and 30% natural gas.

Chesapeake Energy has 178 producing wells in the Eagle Ford Shale and a backlog of nearly 200 wells in various stages of drilling and completion. The company ended 2011 with seven hydraulic fracturing crews and plans to have 11 by March 2012 and 13 by the end of 2012.

Chesapeake Energy Enters Eagle Ford Shale Agreement

Chesapeake Energy (CHK) announced that CNOOC Limited will purchase a 33.3% interest in the company’s properties in South Texas that are prospective for the Eagle Ford Shale.

CNOOC Limited will pay $1.08 billion at the closing of the deal and an additional $1.08 billion through a drilling carry of 75% of the future drilling and completion costs of Chesapeake Energy.

Chesapeake Energy has 600,000 net acres in the Eagle Ford Shale, located mostly in Webb, Dimmitt, LaSalle, Zavala, Frio and McMullen counties. The company estimates that 85% of its acreage is in the oil window, and 15% is in the wet gas window of the Eagle Ford Shale.

Chesapeake Energy said that due to the deal, the company would accelerate development of the Eagle Ford Shale, and increase its rig count as follows:

Current – 10 rigs

End of 2010 – 12 rigs

End of 2011 – 31 rigs

End of 2012 – 40 rigs

Chesapeake Energy said that the company would have 900 wells drilled by the end of 2012, and that its production would peak at 400,000 to 500,000 barrels of oil equivalent per day “in the next decade.”

Chesapeake Energy Issues Eagle Ford Shale Update For The Second Quarter Of 2010

Chesapeake Energy Corporation (CHK) issued an operational update for the second quarter of 2010, and updated investors on its activities in the Eagle Ford Shale. The company has increased its acreage position in the Eagle Ford Shale to 550,000 net acres, an increase of 150,000 net acres from the first quarter of 2010.

Chesapeake Energy has drilled and completed 7 gross wells to date on its acreage in the Eagle Ford Shale, and estimates that it will operate an average of 5 rigs during 2010. The company will ramp up activity much higher over the next two years, and will operate an average of 16 rigs in 2011, and 27 rigs in 2012.

Chesapeake Energy reported the completion of 3 recent wells in the Eagle Ford Shale:

The PGE Browne 1H, located in Webb County, Texas, produced at a peak 24-hour production rate of 11.2 million cubic feet equivalent per day, composed of 4 million cubic feet per day of natural gas and 1200 barrels per day of oil.

The Lazy A Cotulla 1H, located in Dimmit County, Texas, produced at a peak 24-hour production rate of 5.9 million cubic feet equivalent per day, composed of 300,000 cubic feet per day of natural gas and 930 barrels per day of oil.

The Traylor North 1H, located in Zavala County, Texas, produced at a peak 24-hour production rate of 5.9 million cubic feet equivalent per day, composed of 300,000 cubic feet per day of natural gas and 930 barrels per day of oil.

Chesapeake Energy is engaged in discussions with third parties regarding a joint venture on its acreage in the Eagle Ford Shale.  The company expects to make an announcement by the end of the third quarter of 2010.