docFinder alert PLS PLS
Week of May 4, 2015Volume 5, No. 1

Leaders are making money today - at $50 oil

Eagle Ford core oil, Upper Wolfcamp, SCOOP Springer, Bakken, Wilcox liquids


EOG Resources: Eagle Ford

Better ROR's than 2012


March 17, 2015

Full Presentation



Encana: Eagle Ford

Karnes County 40% RORs


April 7, 2015

Full Presentation


This docFinder Alert highlights the resilience of our industry.  When challenged, we don’t retreat, we innovate and adapt.  The two companies highlighted above, EOG Resources and Encana, are striking examples of the power of a pioneering and nimble spirit.

The slide above left from EOG is a stark example of the benefits of a relentless focus on increasing efficiencies (i.e. lowering costs) and optimizing innovative completion best practices.  Today, assuming $60 oil, EOG’s RORs on the black oil western edge of the Eagle Ford are comparable to those in 2012 with oil at $95.  How is this being done?  Simply put – getting more for less.  Beginning with the known constant (aka OOIP), the Eagle Ford has 30 – 90 MMbbl original oil in place with a historical recovery of up to 10%.  Now that’s a lot of oil left behind.  As ex-EOG exec Mark Papa predicted, the future growth of US shale resources is likely to come not from finding new shales – but from continuous innovation and increasing the recovery factor.  In 2015, EOG will be running 15 rigs in the Eagle Ford and with its High-Density Completion techniques are squeezing 39% more oil per completion versus a year ago.

The slide above right is from Encana – also an Eagle Ford leader.  Since acquiring the position from FCX in May 2014 for $3.1 billion, Encana has delivered ~25% improvement in IP30 rates, a ~10% decrease in drilling costs and a ~25% increase in cycle times.  Similar to EOG, ECA is downspacing (in Karnes County) to extract more oil with pilots underway today on 30-acre spacing.  ECA’s key Eagle Ford stats include 45,400 net acres with type curves from 250-740 MBOE and ROR’s of 30-40%.  Based on well costs of $7 - $8 million, ECA achieves its hurdle 9% IRR at oil prices of $30 - $50/boe.

More slides and data below. 

According to Credit Suisse, using strip NYMEX pricing as of February 19, 2015 (12-month strip was $56.18/bbl and $3.06/MMbtu compared to $62.32 and $3.01 as of close May 1st), the Eagle Ford is only second to the Wolfcamp in the northern Midland Basin for single-well rates of returns for oil-focused plays.  Shown below are more examples of economic plays being drilled today by Laredo Petroleum, Continental Resources, Whiting Petroleum and Unit Corporation.

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    featured.slides from docFinder

    Slide Slide Slide Slide

    Laredo Petroleum

    Upper Wolfcamp

    April 13, 2015

    Continental Resources

    SCOOP Springer Oil

    April 1, 2015

    Whiting Petroleum

    Middle Bakken

    April 13, 2015

    Unit Corporation

    Wilcox Liquids

    April 20, 2015

    Laredo Petroleum 

    recently held an Analyst Day meeting and emphasized doing “it right from the start”.  This homework is paying off as LPI has 828 profitable Upper Wolfcamp wells in inventory.  Helping achieve this feat is 3D seismic and an optimized Earth Model which ups EURs 10% and lift RORs 25%.  Increased EURs plus lower AFEs result in RORs today rivaling those of $90 oil a year ago.

    Continental Resources is expanding its SCOOP Springer oil discovery where it has achieved well IPs of nearly 1,500 boepd.  There is plenty of running room where CLR has de-risked 46,000 acres along its 123,000 acre position in the oil fairway.  Based upon EURs of 940 Mboe and $9.7 MM CWC and $50 oil, RORs yield 30%, reaching 40% with an expected 15% in lower costs.  These are the best oil economics in CLR’s inventory.

    Unit Corp is focused on horizontal liquids-rich drilling and highlights a play not splashed on the front pages.  In SE Texas, UNT is drilling the Wilcox in its Gilly field.  With CWC of $4.8MM and EURs of 9.3 Bcfe, RORs are >100% based on $50 oil, $14.11/bbl NGLs and $3 gas. In the Wilcox liquids play, UNT expects to run 1-2 rigs in 2015 to increase production 18%.  There is plenty of upside with 110 horizontal wells in inventory.

    Full Presentation

    Full Presentation

    Full Presentation

    Full Presentation