Eagle Ford Shale

Talisman Energy - Third Quarter Of 2010 Eagle Ford Shale Conference Call Commentary

Talisman Energy (TLM) held a conference call on November 2, 2010, to discuss its financial report for the third quarter of 2010.  The company also disclosed additional information on its acreage in Texas that is prospective for the Eagle Ford Shale.

“We haven’t yet finalized plans for the Eagle Ford or for anything else next year and that’s why I’m really just saying to you that we’ll tell you all about that in January when we tell you the guidance.”

“If you’re going to have natural gas liquids, frankly, you might as well have them in the Eagle Ford because that part of the country is still natural gas liquids short so the price, essentially, is being set by imported natural gas liquids from somewhere else.’

“Let me start with the Eagle Ford Shale. We, in one of the attractive components of the enduring transition that we expect to close by the end of this year is that of the 97,000 acres, about 50% is already held by production through conventional production in the Austin Chalk so that puts us on a very manageable expiry profile in the Eagle Ford going forward with only, it’s like 50% of the acreage under the gun.”

“And then in the Eagle ford, the dynamics are clearly different with today a very large differential between gas and liquid prices, and so the break even in the Eagle Ford today, should those differentials be maintained, is also going to be well within that $4 an MCF break even. And those are all full cycle numbers as we always talk about.”

“The Eagle ford looks better because of the liquids component and that’s contributed to a much lower break even.”

Source

Talisman Energy Acquires Eagle Ford Shale Acreage And Enters Joint Venture Agreement

Talisman Energy (TLM) and Statoil (STO) announced that they have entered into a joint venture agreement and acquired acreage in Texas that is prospective for the Eagle Ford Shale.

Talisman Energy will be the operator of the joint venture, which also agreed to purchase 97,000 net acres in the Eagle Ford Shale from Enduring Resources for  $1.325 billion. The company said that after adjustments, the price per acre was $10,900.

Talisman Energy said that the net cost to the company would be $485 million. Statoil is required to purchase a 50% working interest in the 37,000 net acres that Talisman Energy held prior to the creation of the joint venture.

Details on Property

There are three rigs currently operating on the newly acquired acreage, with current production of 5,500 barrels of oil equivalent (BOE) per day from six wells. Talisman Energy said that the estimated ultimate recovery (EUR) of Eagle Ford Shale wells would average 660,000 BOE per day.

Talisman Energy said that eleven additional wells have been drilled or are currently drilling, and the joint venture plans nine more wells by the end of the year. The company said that the initial production rate on the two most recent wells averaged 3700 BOE per day, with a high proportion of liquids.

Rosetta Resources Updates Eagle Ford Shale Operations

Rosetta Resources (ROSE) issued an update on the company’s activities in the Eagle Ford Shale for the second quarter of 2010. The company has a total position of 64,000 net acres in the Eagle Ford Shale, and estimates that 75% of its position is in the liquids rich area. The average cost for the acreage is approximately $900 per acre.

Rosetta Resources is currently operating two rigs in the Eagle Ford Shale and will add a third rig shortly. The company expects to drill 30 to 35 wells in 2010, including 25 to 30 wells in the Gates Ranch area.

Rosetta Resources estimates that the average cost to drill and complete an Eagle Ford Shale well is from $6.5 to $7.5 million, and the company is using lateral lengths of approximately 5000 feet and 13 to 15 hydraulic fracturing stages.

Gates Ranch

The main liquids project area for the company in the Eagle Ford Shale is in the Gates Ranch area, where Rosetta Resources has 29,500 net acres. The company has drilled fourteen total horizontal wells in this area since beginning its development program, and completed twelve of these wells.

Rosetta Resources reported that the average seven day gross production rate for wells here was 320 barrels per day of condensate, 500 barrels per day of natural gas liquids and 3.1 million cubic feet per day of natural gas. This converts to 8 million cubic feet equivalent per day. Total production from the Gates Ranch area is 59 million gross cubic feet equivalent per day, or 44 million net cubic feet equivalent per day.

Encinal/Springer Ranch

The company’s dry gas position in the Eagle Ford Shale is in the Encinal/Springer Ranch area. Rosetta Resources is cutting its drilling back in this area due to low natural gas prices. The company has drilled four total horizontal wells in this area since beginning its development program, and completed two of these wells.