There has been much discussion about the big Eagle Ford JVs and rightfully so. Foreign supermajors such as Statoil, Talisman, Reliance and CNOOC buying in and spending BILLIONS combined is exciting news. However, there also are smaller companies making moves to develop their acreage on much smaller scales. Take Magnum Hunter for example.
Magnum Hunter owns 22,864 net acres, much of it in the oil window. They already have a few AMIs, 29,576 gross acres with Hunt and 2,100 gross acres with EOG, in Gonazales County. Now they released new information regarding a 3,000 gross acre AMI with an undisclosed, independent E&P company. The AMI is in Gonzales and Lavaca County. The two companies will participate 50/50 in at least two wells, the first being the Southern Hunter 1H.
This got me to thinking, what other information can I glean from Drillinginfo about Magnum Hunter and the other operator? After all, this is one of the great uses of Drillinginfo, to identify the activity of smaller companies, both public and private that don’t give out as much information as the larger companies. Lucas Energy is another such company until they recently revamped their website and began disclosing their activites in a more timley basis.
Well, here is a map I generated from Drillinginfo after some quick digging (about 10 minutes). This first map shows the Southern Hunter 1H (the first well in this JV) and the surrounding leases. I am not sure who Energy Horizons is, but they look like a good candidate as the “other” private E&P company in the JV. Also, maybe Cortez although their acreage doesn’t spill into Lavaca like Energy Horizon’s does.
Magnum Hunter will spud the second well in this JV about 90 days after the evaluation of the Southern Hunter, according to the press release. Check back early and often with this blog and the Eagle Ford DNA Unconventional Update.
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Energy Horizons is a company owned by EOG. I have land leased to them 3 miles southwest of the Southern Hunter well that is being drilled currently.
I’m almost certain that the “other” company is Geosouthern. They contracted Jim Burgin & Associates to buy leases for them as early as late 2007 or early 2008.
We are seeing just the tip of the iceberg of the most significant new oil field in Texas history. Before Eagle Ford is over it will make the giant East Texas Field of the 1930’s look like a poor relation. I predict we are going to see EUR’s of high grade crude oil far surpass the 750,000 boe high end projections. Whispers abound that the true potential is far greater than we have been led to believe.
Magnum Hunter was late to the party and if they are seeing this kind of success, imagine what operators like EOG Resources will have with their premiere acreage positions. Every time a listen to a Eagle Ford operator presentation I get the feeling the speaker has full choke on his remarks as to what to expect, as if they trying to buy time to increase their acreage positions before the cat is completely out of the bag. As far as I am concerned the genie got out of the bottle months ago.
Mike: I’ve been reading your blog for a while, and you’re doing a great job keeping up with all developments. My wife and I have 40 acres 4 miles southeast of Shiner. This appears to be in the area you have described as the “Goldilocks” area. We are leased, of course, and the initial three year term expires in January. The lease calls for an option price to be paid at that time to extend the lease the full five years. There has been no 3-D seismic shot in our immediate area. Based on your information, when might we expect some action in our area in the Eagle Ford? And thanks again for all your hard work. Tom Couch.
The Company’s Southern Hunter #1-H is located approximately 7 miles southwest of the Gonzo Hunter #1-H. The well was spud on October 14, 2010 and was drilled 11,779 vertical feet plus 4,460 horizontal feet. After a 14 stage frac job, flowback commenced on January 7, 2011. Currently, the Southern Hunter #1-H is flowing to production at approximately 1,335 Boe per day and 212 Bbls per day of water on a 13/64 inch choke with flowing tubing pressure of 4,300 PSI. The currently estimated gas-to-oil ratio (“GOR”) is below 1,000 and the crude oil flowing to production has an API gravity of approximately 43 degrees. Based on current production characteristics, the Company believes the Southern Hunter #1-H’s EUR to the 100% working interest is estimated to be in the 500,000 Boe range. Magnum Hunter is the operator of the well and owns a 50% working interest.
I think all the operators are peddling as fast as they can. It will take a long time to get around to everyone, get them leased and HBP. You are looking at years before they can lock everything up and get it drilled. This play will last for many decades. Good thing for landowners is lease bonus and royalty will go up substantially as the play is developed. The oil window and NGL window are extremely economic and without peers,. Nothing touches the ROI of Eagle Ford, not the Bakken, Barnett, Woodford, Haynesville, Marcellus, or any other shale. Saudi Arabia might give Eagle Ford a run for the money but nothing else. Eagle Ford is huge beyond description.