Eagle Ford Shale

Rosetta Resources Increases EUR Of Eagle Ford Shale Wells In Gates Ranch Area

Rosetta Resources (ROSE) reported an update on the development of the Eagle Ford Shale during the second quarter of 2011. 

Rosetta Resources increased the gross estimated ultimate recovery (EUR) of Eagle Ford Shale wells in the Gates Ranch area to 10 Bcfe, from 7.2 Bcfe previously.  This increase is based on up to two years of performance in some areas, according to the company.

Rosetta Resources estimates that each Eagle Ford Shale well in the Gates Ranch area has a pretax net present value of $20 million.

Rosetta Resources reported average production of 129 million cubic feet of natural gas equivalents per day in the second quarter of 2011, up from 89 million cubic feet of natural gas equivalents per day in the previous quarter.  This represented sequential growth of 45% and Eagle Ford Shale production is now 80% of the company’s total production.

Rosetta Resources has completed forty horizontal wells into the Eagle Ford Shale as of 6/30/2011, and is currently operating three rigs in the play. The company plans to drill between 25 and 28 additional Eagle Ford Shale wells in 2011

Rosetta Resources recently started two pilot infill drilling programs at the Gates Ranch area to test fifty acre down spacing.  The first pilot program has been drilled and the company expects the wells to be completed by the end of 2011.

El Paso - Eagle Ford Shale - Dry Gas 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 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.   

El Paso - Eagle Ford Shale - Northern 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 it produces primarily oil or natural gas.

North Oil

El Paso has 31,000 net acres in what the company calls the north oil area of the Eagle Ford Shale and has disclosed financial and operational details on the play in this area.

Eagle Ford Shale wells in the northern oil area are typically drilled to a depth from 6,000 to 7,000 feet with a horizontal lateral of 4,500 to 5,500 feet. The average well costs from $5.0 million to $7.5 million and has a gross estimated ultimate recovery ranging from 400,000 to 550,000 barrels of oil equivalent (BOE) per well.

Eagle Ford Shale wells drilled by El Paso have an initial production rate from 400 to 800 BOE per day and average between 300 and 600 BOE per day during the first thirty days of production.

El Paso estimates that northern oil wells have an internal rate of return from 25% and 45% 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 $14 and $22 per BOE.