Anadarko cuts Eagle Ford drilling time, cost
Anadarko Petroleum Corp. reduced its South Texas Eagle Ford drilling times to 7.6 days from 8.4 days during the fourth quarter 2014 while reducing costs to a low of $89/ft. Anadarko spudded 87 wells using eight operated rigs and brought 88 wells on stream during the quarter. It reported a gross-processed-production record of 250,000 boe/d. Anadarko’s net sales volumes averaged 82,000 boe/d during the fourth quarter, a 54% increase compared with the fourth quarter 2013. Total liquids volumes for the fourth quarter 2014 averaged more than 58,000 b/d, up 58% from the fourth quarter 2013.
Rosetta Resources will focus on Gates Ranch
Rosetta Resources Inc. plans to complete 20 gross operated wells in the South Texas Eagle Ford during 2015 while it holds its core acreage positions and conserves inventory for a commodity price recovery.
"The company sees preserving resource inventory and defending production levels as the most appropriate course of action for delivering attractive shareholder value in a depressed commodity price environment," executives said as they outlined a 2015 corporate budget of up to $350 million.
Jim Craddock, Rosetta’s chairman, chief executive officer, and president, said, "We’ve chosen to defer production growth and focused instead on living within our means, maintaining our core acreage positions, and defending a target production level of about 60,000 boe/d…. We stand ready to increase capital spending when commodity prices warrant."
In the Eagle Ford, Rosetta Resources will focus on its high rate-of-return areas in the southern Gates Ranch, adding its average oil ratio is expected to be about 28% during 2015 as it concentrates on southern Gates Ranch.
Executives said they expected reductions in Rosetta’s drilling, completion and other service costs in the range of 20-30% as compared with 2014 levels.
Victory to buy Lucas Energy
Victory Energy Corp. of Austin, formerly focused on the Permian basin, announced preliminary plans to combine with Lucas Energy Inc. of Houston, which focuses on the Austin chalk and South Texas Eagle Ford plays.
Closing remains contingent on the signing of a definitive merger agreement, which will contain customary terms and conditions. A letter of intention plans call for Lucas to issue equity to Victory’s shareholders with no cash payment being made.
Kenneth E. Hill, the current Chief Executive Officer and Director of Victory Energy, is expected to serve as the Chief Executive Officer and President of the combined company.
Upon closing, the shareholders of Victory and Victory’s partner Navitus Energy Group, will own most of the outstanding Lucas shares.
Victory and Lucas are negotiating a financing agreement intended to provide Lucas with necessary working capital before closing. Seven of Lucas’ Eagle Ford wells with varying working interests are expected to be financed and brought on stream during February through June.
Total financial needs are estimated at $12 million during the business combination with additional funding for post-closing debt reduction and expansion to exceed $8 million.
Carrizo directs its 2015 spending on Eagle Ford
Carrizo Oil & Gas plans to spend most of its 2015 budget in the Eagle Ford shale, saying 80% of its 930 net wells in the South Texas play are expected to be economic with crude oil prices on the New York futures market at less than $44/bbl.
"Despite the low breakeven cost of our assets, we think the prudent thing to do in this environment is to downshift our production growth until commodity prices recover," S.P. "Chip" Johnson IV, Carrzo’s president and chief executive officer, said.
Carrizo’s 2015 oil production guidance is 21,800-22,400 b/d, and using the midpoint of this range, the company’s 2015 oil production growth guidance equates to 17% from 2014. For natural gas and NGLs, Carrizo’s 2015 guidance was 65-75 MMcf/d equivalent.
Johnson noted that more than half of the companywide inventory is economic below $50/bbl.
"Our 2015 drilling and completion plan currently calls for us to spend approximately 35% less capital than last year and hold our oil production roughly flat with the fourth quarter of 2014," Johnson said. "This should maintain our strong balance sheet and also position us to quickly resume rapid oil production growth once commodity prices recover."
Examiners recommend Eagle Ford waste site
Texas Railroad Commission hearing examiners have recommended granting an application for a proposed Pyote Reclamation Systems 143-acre oil waste facility near the town of Nordheim.
Neighbors of the proposed site have protested it for 2 years, and they dispute land characteristics statements made by experts hired by Pyote.
Residents maintain caliche underlays the proposed site while Pyote experts reported a thick clay exists that will provide a barrier between oil field waste and groundwater.
George Wommack, general manager of Pyote, said he was pleased by the outcome of the public hearing process. The RRC will make a final determination on the application.
