Fewer rigs, Less production: Eagle Ford/Pearsall

01 Aug 2015

SHALETECH World Oil, August 2015

Operators in the triple-window Eagle Ford shale these days seem to have one eye squinted on commodity prices and the other clearly fixed on invoices from service and equipment providers.

Indeed, with the former in retreat and showing no signs of a sustained recovery anytime soon, operators see that their best opportunity for generating a facsimile of reasonable returns is to continue hammering down well costs, while concentrating strained resources on the sweetest of spots, leaving more marginal prospects, like the underlying Pearsall shale, for a more prosperous day.

Today, operators report year-over-year total well cost reductions as high as 40%, and, with enduring pricing pressures, some analysts say breakeven costs could sink to as low as $41/bbl by next summer, further reinforcing the Eagle Ford as one of the most economical of the unconventional plays. That economic reality apparently hit home with Noble Energy, Inc., which on May 11 snapped up Rosetta Resources Inc. in a $2.1-billion all-stock transaction that gives the Houston independent 50,000 net acres in the Eagle Ford, along with a leasehold in the Permian basin. Continues...

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Author: Jim Redden, Contributing Editor

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