Schlumberger's HiWay Frac Design Improves Eagle Ford Well Performance

Schlumberger HiWay Channel Fracturing

Schlumberger's (SLB) HiWay flow channel frack design has been most successful in the Eagle Ford. The company has completed a significant number of wells in the basin and has shown the design increases production while utilizing less proppant.

The production response has not been as positive in other plays, but the company generally sees flat to higher production with lower well costs. The advantage where production isn't higher is the cost savings realized by using 40% less sand/proppant.

Paal Kibsgaard, CEO, stated "We believe its (HiWay Frac's) applicable in every basin"

Also read: Forest - Schlumberger JV Allows Forest to Drill More With Less

Record North American Revenue

Schlumberger reported strong results in the third quarter. The company's North American revenue was up 7% and set an all time high at $3.6 billion.

The company did see downward pricing pressure, but less than it has experienced in prior quarters.

Schlumberger also discussed ongoing tests to increase the utilization of perforation clusters in completions. Prior tests have shown that 30-70% of perforation clusters do not contribute to production. The company is testing a diversion technology that is employed during the completion. Watch for future announcements from Schlumberger and other oilfield service providers.

If possible, it's in everyone's best interest to increase well performance by 30-70%.

Heard At The Eagle Ford Well & Frac Design Conference - Day 1

Eagle Ford Well & Frac Design Conference

We spent yesterday afternoon at the Eagle Ford Well & Frac Design Conference in Houston. The biggest takeaway was it is still early in the life of the Eagle Ford and operators are learning more with every well. Don't be surprised if the extent of the Eagle Ford grows as more is learned.

A few of the things we noted include:

• The boom is expanding into Brazos County & the surrounding area. Watch for activity from more than just Halcon later in the year
• Operators are targeting the Pepper Shale interval of the Woodbine/Eagle Ford in the Eaglebine area
• Hitting your target is very important in the Eagle Ford. One operator found just 60% of fracks were successful when above the target zone and just 15% successful below the zone
• Operators are seeing improvements by pumping more sand per foot of lateral. Up to 1,500-2,000 lbs/ft
• Stage spacing is difficult to determine. You can't change it once you start the completion
• Much more clay can be present than previously thought
• The Eagle Ford and its equivalents stretch 2,000 miles into the Northeast
• Fina had a well with a production contribution from the Eagle Ford Shale in the 1920s
• 214 of the approximately 6,400 wells have been dry holes to date
• Common well failures include: Lateral collapse, casing collapse, out of zone drilling, geologic faults, and operators unable to drill out plugs
• ZaZa calls it "Slow back" - controlling reservoir pressures early on is an important factor in stabilizing the reservoir

You can learn more about the conference HERE

Swift Energy Will Fund Accelerated Eagle Ford Development With Louisiana Sale

Swift Energy Eagle Ford Production Chart

Swift Energy has abandoned plans to find a joint venture partner in the Eagle Ford in favor of selling assets in Central Louisiana. Executives note the lack of premium placed on their Eagle Ford assets in the market. They view the Eagle ford as the best assets in the company and prices simply aren't what they were the past few years.

Instead, the company will sell assets in Louisiana. As a result, the capital budget in the Eagle Ford was increased by $50 million and Swift plans to maintain a two rig program through the rest of 2013.

Company-wide production was down slightly in the quarter and Eagle Ford production was down to flat. There were gas gathering constraints in Webb County during the quarter, but Eagle Ford production had rebounded to grow 10% in July.

“Our performance in the prolific Eagle Ford shale trend in South Texas continues to improve according to our plans. When compared to 2012, our 2013 South Texas well results have delivered higher initial production rates, larger estimated ultimate recoveries (“EURs”) and lower costs. Additionally, during July our average daily production rate in our South Texas core area was approximately 10% higher than our second quarter 2013 average production rate.”

— Terry Swift, CEO

Swift Eagle Ford Acreage Map

During the second quarter, Swift drilled 14 operated wells targeting the Eagle Ford. A total of six wells were drilled in La Salle County, four in McMullen County, and two in Webb County. As for completions, the company brought 15 Eagle Ford wells and one Olmos well online during the quarter.

Production fell slightly in the second quarter, but had rebounded to increase 10% to almost 18,000 boe/d in July.

Watch for additional improvements in costs and initial production rates. Swift has lowered costs by 13-16% in the Artesia and N. AWP areas while improving initial production by 15-18%. That's a win-win.

Now that the company has turned its focus to developing the Eagle Ford and not simply seeking a JV partner, don't be surprised to see significant growth in the coming quarters. The company already expects 15-20% production growth in the area in 2014.

SM Energy Increases Eagle Ford Completion Guidance - Adds Eaglebine Acreage

SM Energy Eagle Ford Map

SM Energy has raised full-year, company-wide production guidance by 10% to 47.9 mmboe. The increase is largely due to impressive performance in the Eagle Ford.

Operated Eagle Ford production volumes increased 28% from the first quarter to the second quarter. Operated production in the play averaged 66,100 boe/d and non-operated production averaged 17,400 boe/d for a total of 83,500 boe/d net.

SM also increased its Eagle Ford completion guidance from 75 to 95 for the full year. Better yet, the company isn't increasing its planned capital outlay. That means they'll bring 20 wells to production at the same level of investment previously announced. That's the kind of win-win every operator is looking for.

Well costs in the Briscoe area have fallen to $5.4 million per well, or 13% less than 2012.

Expanding East Texas Eagle Ford & Woodbine Position

SM Energy increased its holdings in its Eagle Ford and Woodbine prospect to 195,000 net acres in the quarter. Watch for results from exploratory wells in the second half of the year. The play could provide another growth opportunity for the company.

Read the company's full press release at sm-energy.com

Pioneer's Eagle Ford Growth Back Weighted - Drilling 2-6 Well Pads

Pioneer Eagle Ford Production Chart

Pioneer Natural Resources brought on 58 Eagle Ford wells in the first half of the year and expects to bring on 78 wells in the second half. Production growth will be weighted to fourth quarter due to a shift from single-well to multiple-well pad drilling.

Only 45% of wells drilled in 2012 were drilled from pads, but that will grow to 80% in 2013. Wells drilled from pads take longer to bring to production, so the shift has delayed production growth. It takes Pioneer 100-120 days from the time of first spud to production from a three well pad.

Pad drilling saves time and costs, but it results in more lumpy production growth. Pad drilling saves $600,000-700,000 per well and will allow Pioneer to drill at a level similar to 2012 with two fewer rigs.

Production growth slowed in the second quarter, but will pick up again in the second half of the year. Production grew to an average of 38,000 boe/d in the second quarter from 37,000 boe/d in the first quarter.

Watch for results from Pioneer in regard to testing 40-acre pilot wells and 10,000 ft horizontal laterals in certain areas.

The company continues to expand the use the white-sand proppants and now publicizes a savings of $1.1 million per well compared to wells completed with ceramic proppant.

Read the full press release at pxd.com