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Eagle Ford Shale - Oil & Gas Discussion

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Eagle Ford Shale - Oil & Gas Discussion

Oil & gas discussion group for those interested in Eagle Ford Shale. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.

Website: http://www.eaglefordshale.com
Location: South Texas
Members: 375
Latest Activity: on Friday

Discussion Forum

Leasing

Started by gabby. Last reply by Rock Man on Friday. 5 Replies

I am curious if any of you have heard of Delgado Leasing?  They approached us on leasing our property the lease we have not is with Geosouthern and comes to an end next March.  Any suggestions? Continue

Value of Land in La Salle County

Started by Geri Seymour. Last reply by Kelly Taylor May 3. 11 Replies

We have been approached by EOG to purchase our 10 acres for the land only.  The mineral rights would remain with us.  Does anyone know what the going rate is for acreage in La Salle County and if…Continue

Lavaca County

Started by Mary Ann Whisenhunt. Last reply by tbb May 1. 3 Replies

Has anyone seen drilling activity in the mid Northwestern part of Lavaca County?

Production Sharing Agreement.

Started by Andy Jabsen Apr 29. 0 Replies

Hello all, my brother and I own roughly five acres apiece that is part of the Franke Unit off of FM 99, on CR 224. It was recently transferred to Encana. The other day we received paperwork in the…Continue

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Comment by Marcus T on April 21, 2014 at 1:09pm

Totally agree - I have a new well awaiting completion that is only 219 feet parallel from another one. If that downspace test works out successfully I'm not even in the second inning of the game yet. Many of us aren't.

Comment by Rock Man on April 21, 2014 at 12:21pm

Remember that well spacing in the EF play will vary from 40 to 8- acres (or even smaller than 40 acres depending on what some companies are saying). As a result, multiple wells can be drilled on any one unit - and the subsequent wells may be drilled years after production is first established.

As a result, one can see repeated cash upticks tied to flush production from new wells in the future. And then the additive volume of the stabilized albeit lower rate flow from older wells over time.

Much of the production / cash flow issues tied to these unconventional reservoirs is what will be there for your estate / heirs down the road and not just for you in the next few years.

Comment by David James on April 21, 2014 at 11:55am

A lot of the production declines are steep because the wells are being choked back. If you let them flow at full force it damages the well limiting overall production capabilities. I would not advise selling your minerals based solely on production curves. With pump jacks the Eagle Ford wells will produce for another 30+ years. If your land is held by production, items such as whether your lease has a pugh clause or the royalty amount are far more important. 

I don't typically advise that mineral owners sell their minerals, but if you want assistance in finding a buyer I am happy to help you find one that will pay competitively. 

My email is david@hilltoproyalties.com

Comment by Marcus T on April 21, 2014 at 11:48am

I agree with your concerns, Robert. I too have minerals in EOG production units and have seen rapid declines in monthly production. The wells on my units aren't on artificial lift yet and that's when I expect to see declines hit the flatter part of their curves. From then on out the profitability of the wells will depend on how much water the wells make and other operational expenses in addition to production decline and the price of oil/gas/NGLs. A 100 or even 25 barrel per day well can still be very profitable to an operator as long as expenses are low enough and the well has already paid off. I'm sure at some point in the future we'll see smaller operators buying some of these old units from the larger ones in hopes of finding untapped potential or just operating them more efficiently for better profit. Where I live there are hundreds of leases drilled back in the early 1900s by Texaco and Conoco (or their predecessors) that have changed hands numerous times over the decades and are still producing under local/regional operators.

Another fact to consider concerning EOG is that they are currently testing enhanced recovery techniques in an attempt to recover more of the oil from the EFS. This may make a very significant impact on future production and profitability. At this point, however, long-term predictions are just guesses with some being more educated than others. For my purposes, I figure on wells declining to 25 barrels per day over five years or so and leveling off somewhere around that. I know decline never stops completely but I just like to keep it simple.

Comment by robert r garrison on April 21, 2014 at 10:47am

Laci, thanks for the reply, but I have gone through EOG's investor presentations and not found any significant discussions re: production declines. My thought is that the declines I have seen are significant enough to wonder about long term strategy for EFS vs drilling and production costs. 

If I were EOG, I would be very concerned and have a plan for long term stable production. Truthfully, I believe they do but I can't find it in the public domain. 

Comment by John Swicegood on April 21, 2014 at 6:15am

Hi Laci, thanks, jrs

Comment by Laci Garbs on April 20, 2014 at 7:08pm
John- I am in Asset Management with Holland Seevices. We represent mineral owners in maximizing your cash flow of your O&G properties. We do a lot of work in the EFS, and have been helping people get the most value for their assets. If you want to discuss your situation and see if it is something we could help you with shoot me an email laci.garbs@hollandservices.com
Comment by John Swicegood on April 20, 2014 at 6:27pm

Hi, I have also been contacted by a firm, San Saba about my mineral interest, in the Freeman-Creagor unit, 543 acres, T Caruthers survey, A-9, presently operated by Ener-Vest. I have no idea what is going on.  I called Ener-Vest and they said I would have to put my request in writing to their land dept, which I am doing. I know the Eagleford play is moving that way, but I can get no info if something has been started or not. Is there anyone who could help with this, many thanks, jrs

Comment by Laci Garbs on March 25, 2014 at 3:21pm

Robert, you can find decline curves online in the company investor presentations. This will give you a good idea of the decline curve in your area. You can then apply that to your past and current production to get a fair future cash flow model for financial planning.  

Comment by Rock Man on March 24, 2014 at 10:46am

Dennis, Totally depends where your lease is located. If in the core of the good production, these numbers are way low (but if your block was in the core I would be surprised you are unleased right now). 

If you are in the more updip or thinner EF area, numbers may be more appropriate although the 20% is low for the trend in general.

 

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