El Paso (EP) has 170,000 net acres in Texas that are prospective for the Eagle Ford Shale and separates the leasehold into three areas based on location and whether it produces primarily oil or natural gas.
Dry Gas
El Paso has 65,000 net acres in the dry gas area of the Eagle Ford Shale and has disclosed the following financial and operational details on wells in this area.
Eagle Ford Shale wells in the dry gas area are typically drilled to a depth from 9,000 to 14,000 feet with a horizontal lateral of 4,500 to 5,500 feet. The average well costs from $7 million to $12 million and has a gross estimated ultimate recovery ranging from 4 to 8 Bcfe.
Eagle Ford Shale wells drilled by El Paso have an initial production rate from 5 million to 15 million cubic feet of natural gas equivalents per day and average from 4 million to 12 million cubic feet of natural gas equivalents per day during the first thirty days of production.
El Paso estimates that wells in the dry gas area of the Eagle Ford shale have an internal rate of return from 0% to 15% at prices of $4.00 per MMBtu for natural gas and $80 per barrel for oil. Finding and development costs for dry gas wells range between $1.50 and $3.50 per Mcfe.
