Enverus Blog

Insights across the energy value chain

Drillinginfo Energy Strategy Partners hosted a free webinar (click here to view a replay) on April 28th to highlight some of the features of our new Unconventional Platform.  The Haynesville and Eagle Ford were the focus, although this platform also includes the Barnett.  I have taken a few interesting slides out of the Eagle Ford presentation to show here.

Below is a chart detailing Eagle Ford production by quarter and colored by window (oil, gas, wet gas) beginning from 2008.  It is clear that liquids rich production really begins to take off in the 4Q2009, about 2/3 is wet gas and oil.  It is also important to note that the wet gas is reported as gas to the state, at which point it is taken off to be stripped of its NGLs (natural gas liquids).  These NGLs are not reported to the state but represent an important part of the overall revenue.  We defined the windows by using public company data (EOG, HK) as well as internal analysis based on producing gas oil ratios.  We will continue to refine the phase windows as more data becomes available.  One final note on this chart is that the 1Q2010 bar only includes January, and some of February production data.  You can see that it is already well over half of the 4Q2009 production.  As the rest of the 1Q2010 data comes in, we expect the production to easily surpass the 4Q amount.

Energy Strategy Partner’s Highlights the Eagle Ford

This next slide shows the importance of operator learning curve and the importance of the liquids content in the Eagle Ford.   You can see the improvement from quarter to quarter indicating progression on the learning curve perhaps.  Also, you can see the quarterly type curves containing more liquids production separate even more when you use a 15:1 revenue basis instead of the standard 6:1 BTU basis (example 4Q2009 curve which according the chart above has a substantial liquid component).  The 15:1 revenue basis is becoming more and more widely used because of the current gas oil price differential.  For example, the closing price for oil and gas on 5/7/10 was $75.1/bbl and $4.01/MMBtu.  This represents a greater than 18:1 differential.   The revenue basis factors in the economic benefit of having a liquids rich production stream.  We used 15:1 in this presentation to be a bit on the conservative side, as many people are using 18:1 and even 20:1.  These higher ratios would only give more value to the Eagle Ford liquids.

Energy Strategy Partner’s Highlights the Eagle Ford

Also included in this webinar was extensive leasing information pertaining to the Eagle Ford.  I’ll include this information in a later blog.  If you would like to listen to a replay of the webinar, check it out here.  DI-ESP will be hosting two seminars later this month detailing further insights into the Haynesville and Eagle Ford using the Unconventional Platform.

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Justin Birmingham

Justin Birmingham is a Research Analyst at Drillinginfo. He creates proprietary research studies, works with statistical models and manages datasets for the DI Analytics team. Justin earned his Bachelor of Science from Texas State University – San Marcos.