Eagle Ford Record Set for Well Spuds in Q3

Eagle Ford Well Spuds Q3 2013

Baker Hughes released its third quarter estimates for well spuds and the Eagle Ford eclipsed 1,100 wells in a single quarter for the first time. The play accounted for 1,133 or more than 10% of the 9,175 wells spud in the U.S. during the quarter.

Baker Hughes tracks the 14 core counties when evaluating the play, so actual numbers are higher. The oilfield service company tallied 233 rigs the 14 county area during the quarter compared to ~270 in the 30 county area we observed.

Did you know drilling starts on over 1,000 Eagle Ford wells per quarter?

The number of well spuds was up 4% from 1,089 in the second quarter to 1,133 in the third quarter. The average rig in the Eagle Ford drilled 4.86 wells during the third quarter or averaged a little less than 19 days drilling and moving from well to well.

The Eagle Ford and the Permian together accounted for more than one-third of all well spuds in the quarter.

Matador Resources Issues Stock To Fund Eagle Ford Acquisitions & Capital Budget

Matador Resources Eagle Ford Map | Click to Enlarge

Matador Resources priced a public offering of 8.5 million shares at $15.25/share or for total proceeds of near $130 million on September 4, 2013. The capital raised will be used to fund the company's capital budget and acreage acquisitions in its core operating areas.

Approximately 78% of Matador's 2013 capital budget is allocated to the Eagle Ford. Two rigs will run in the region throughout 2013 and one rig will be added in the Permian Basin of West Texas.

Matador also intends to use net proceeds from this offering to fund the acquisition of additional acreage in the Eagle Ford shale, the Permian Basin and the Haynesville shale and for other general working capital needs.

Read the full press release at matadorresources.com

Energy Transfer Adding 100,000 b/d Mont Belvieu Fractionation Plant for Eagle Ford Production

Energy Transfer and Regency Energy announced construction of a second Mont Belvieu fractionation facility at a cost of $350 million.  The plant will complement infrastructure being built to support the Eagle Ford Shale, Permian Basin, and Woodford Shale. Lone Star NGL, the official name of the Energy Transfer and Regency Energy partnership, will build a second 100,000 barrel per day natural gas liquids (NGLs) fractionation plant to support growing demand from liquids-rich areas in Texas and Oklahoma. A 100,000 b/d fractionator is currently under construction with a planned completion date in the first quarter of 2013 and the new fractionator will be completed in the first quarter of 2014. 

The new plant is fully contracted with long-term agreements and marks a string of major developments increasing capacity for crude and NGLs produced in the Eagle Ford.

In the past two weeks, we've had the following major announcements:

• Enterprise is Expanding ECHO Oil Storage Capacity
• Copano Energy is Expanding the DK Pipeline into McMullen County
• Southcross Energy is Adding Eagle Ford Gas Procession and Fractionation
• Boardwalk Adds 150 mmcfd of Eagle Ford Processing and Expands Gathering

Read the entire press release tat energytransfer.com

ConocoPhillips Doubling Eagle Ford Production - 2012

Conoco US Production Chart

ConocoPhillips' Eagle Ford production will double over the coming year. The company released fourth quarter earnings on January 25, along with more detail in regards to 2012. The company exceeded 50,000 boe/d in Q4 of 2011 and expects to grow production to more than 100,000 boe/d by the end of 2012. 

Output would already exceed 60,000 boe/d, but Eagle Ford pipeline and midstream constraints have limited production to date. As additional pipeline and gathering comes online, Conoco will add the 10,000 boe/d held back by constraints and add more than 40,000 boe/d from drilling in 2012. Current plans call for 16 rigs to drill 180 wells in 2012. ConocoPhillip's activity centers around its core acreage in the DeWitt County and Karnes County areas.

Conoco expects to reach peak Eagle Ford production of 140,000 boe/d later in the decade, but that number is likely conservative as the company begins to direct more capital to higher value liquids plays. If natural gas prices remain low, we expect additional capital will be directed to liquids plays in the Permian, Bakken, and Eagle Ford.

Shale Production Booms and Foreign Oil Imports Decline

Shale plays, like the Eagle Ford, are contributing to U.S. production growth that has pushed imports of foreign oil below 50%. That's down from more than 60% just 5 years ago. While hydraulic fracturing is highly debated, its use combined with horizontal drilling has shifted the U.S. from a position of a majority consumer to a producer who supplies most of its oil needs. We're a long way from producing enough oil for the country, but at least we have a bargaining chip at the table. We can produce more oil and have untapped reserves in the ground. If you have a couple of minutes, this is a pretty good article from the LA Times. 

U.S. net petroleum imports have fallen to about 47% of the nation's consumption, down from a record 60.3% in 2005, Energy Information Administration statistics show. It's been 15 years since the nation's reliance on foreign oil has been this low.

Several factors figure into the import decline, but a big one is a little surprising: U.S. petroleum exploration is experiencing a quiet renaissance with the help of technology and new drilling techniques.

The number of oil rigs in production in the U.S. has reached a 24-year high, according to oil field services company Baker Hughes. In 2005, domestic production was 1.89 billion barrels. This year, experts say, production is expected to surpass 2 billion barrels.

Read the full news release at latimes.com