Eagle Ford Shale

El Paso - Eagle Ford Shale - Central Oil Acreage

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 wells produce primarily oil or natural gas.

Central Oil

El Paso has 74,000 net acres in what the company calls the central oil area of the Eagle Ford Shale and has disclosed the following financial and operational details on this area.

Eagle Ford Shale wells in the central oil area are typically drilled to a depth from 7,000 to 10,000 feet with a horizontal lateral of 4,500 to 5,500 feet. The average well costs from $7 million to $9 million and has a gross estimated ultimate recovery ranging from 400,000 to 900,000 barrels of oil equivalent (BOE) per well.

Eagle Ford Shale wells drilled by El Paso have an initial production rate from 600 to 1,100 BOE per day and average between 400 and 900 BOE per day during the first thirty days of production.

El Paso estimates that central oil wells have an internal rate of return from 25% and 50% at prices of $4.00 per MMBtu for natural gas and $80 per barrel for oil.  Finding and development costs for wells here range between $12 and $20 per BOE.  

Anadarko Petroleum - Q4 2010 Conference Call - Eagle Ford Shale Comments

Anadarko Petroleum (APC) reported earnings for the fourth quarter of 2010 and held a conference call on February 1, 2011, with investors and analysts to discuss the results.  The company disclosed additional data on its operations Texas where the company is developing the Eagle Ford Shale. 

“We also continued to achieve reduced drilling cycle times, with notable improvements throughout the onshore portfolio. One of the most dramatic examples was in the Eagle Ford Shale, where our spud-to-release times are now less than 12 days compared to more than 22 days in mid-2009.”

“Turning to the Eagle Ford Shale in South Texas, we recently established ourselves as the largest producer in this play. With the existing infrastructure and service agreements in place, about 94% of all completed wells have been flowing to sales. We ended the quarter with gross sales volumes of about 27,000 barrels of oil equivalent per day, of which 75% is liquids. This represents a six-fold increase in volumes versus the prior year fourth quarter.”

“At current market prices, the Eagle Ford Shale is generating excellent economics. And with 450 million barrels of oil equivalent and net risk resource potential on our acreage and more than 2,000 identified well sites, we plan to ramp up to 10 rigs by the end of the first quarter of 2011 from two rigs at the beginning of 2010. We continue to evaluate the joint venture structure for our Eagle Ford Shale program similar to what we have done in the Marcellus.”

Source

SM Energy Reports On Eagle Ford Shale For Fourth Quarter Of 2010

SM Energy (SM) released an operational update on its activities in the Eagle Ford Shale in Texas during the fourth quarter of 2010.

SM Energy reported that its production from operated wells in the Eagle Ford Shale was 5.5 Bcfe in the fourth quarter of 2010, up 53% from 3.6 Bcfe in the previous quarter.  The company’s non operated production reached 2.4 Bcfe if the fourth quarter of 2010, up 85% from 1.3 Bcfe in the third quarter of 2010.

SM Energy also released the economic sensitivity of operated wells drilled into the Eagle Ford Shale, utilizing different commodity prices.

Oil Price	$  65	$  75	$  85	$  95
MMBtu	$ 3.5	$ 4.5	$ 5.5	$ 6.5
Pre Tax IRR	12%	27%	45%	68%

The analysis by SM Energy assumes that Eagle Ford Shale wells have an estimated ultimate recovery of 2.9 Bcfe per well, a gross well cost of $7 million and average initial production of 4.9 million of cubic feet of natural gas equivalents during the first thirty days of production.