Breaking the Eagle Ford Into Regions. Earnings Call Notes – Hess, Murphy, Talisman

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Along with posting current news and analysis, I like to use this blog to show different ways to use Drillinginfo data.  Before I post some E&P notes of certain operator conference calls, I’d like to show one way we use the data in DI-ESP.  Below are a map and a chart breaking the Eagle Ford into different regions.  This allows for comparison of well performance, type curves, and a ranking of best areas in the trend.

Breaking the Eagle Ford Into Regions.  Earnings Call Notes – Hess, Murphy, Talisman

Breaking the Eagle Ford Into Regions.  Earnings Call Notes – Hess, Murphy, Talisman

I like bottom chart because it allows for a quick visual inspection of how diverse an operator position may be and where exactly they are spending most of their capital.  EOG, Anadarko and Petrohawk have been at the top of Eagle Ford activity charts for a while but all operate in different areas.  Anadarko is focused in the Maverick Basin, EOG in the East and West oil windows, and Petrohawk in the wet Hawkville and Sugarkane Corridor. 

Hess 2Q 2011 Earnings Call E&P Notes

– Have been acquiring additional acreage throughout the year and still won’t disclose their position.  Hess says their early entry cost was $3,000/acre

– Hess has moved from a 15 stage frac, to a 21 stage frac

– Well costs are $10MM/well

– Hess expects 25-30 Eagle Ford wells to be drilled in 2011.  Thus far, 15 have been drilled.  Of these 15, 3 have been completed.

– Avg IPs are 650 BOEPD, 80% is liquids

In the past Hess has disclosed that their early entry acreage is in firmly in the wet gas portion of the play.  $3,000/acre seems dirt cheap when compared to many of the recent deals.  Hess has a few advantages when compared to the smaller operators in that the Eagle Ford only represents a small portion of their portfolio.  A rough calcualtion yields $300MM gross for 30 wells in the Eagle Ford in 2011.  Compare that with the nearly $2B Hess is spending net in the Bakken in 2011.  Leasehold drilling aside, Hess may have some flexibility to slow down and really study what the best practice drilling and completion program entails.  Just a thought, I hear from time to time that many operators down there are in such a hurry to drill and complete that they often neglect true best practices from an engineering standpoint.  That’s it for now, I’ll post on some other operator earnings reports as they continue to come out.

Other Notes

– Talisman experienced a 3 month delay in Eagle Ford production due to completion crews.  They explained that they could have completed wells earlier but refused to pay higher spot rates.  Talisman now has 2 full time completion crews.

– Murphy Oil has identified about 2500 drillable locations containing 500 Mbo + 4 Tcf recoverables on their 250k net acre position.  The Murphy position is located in one of the sweet spots of the trend, bordering the east oil and sugarkane corridor.

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