Several people who follow this blog have asked me about Eagle Ford declines, and for good reason, as declines help determine the amount of oil the average well will recover. Companies rarely provide this data and investors typically only get granular information from small independent E&Ps (Comstock Resources (CRK) gives great decline information in its presentations). One of the purposes of this blog is to “fill in the gaps” for investors so that when they read that the 30-day rate on an Eagle Ford well in Lavaca County was 700 BOEPD, they know just how good that result is and how it will perform in the future.
With that said, the Eagle Ford is still a new play, so there’s not a large sample size of data to look at because there’s not many wells that have produced more than a year and much fewer that have produced more than two years. Luckily, there are some, and I’ve provided data on 70 of those wells below for you to view. I believe the data I have gives you a macro view of how the Eagle Ford is declining during the first year, but I would hesitate to draw many conclusions from any of the counties (excluding Karnes) because there’s not enough wells from each county that have been drilled by multiple operators.
1) The Texas Railroad Commission (TRC) only provides monthly production data and doesn’t state how many days a well (it technically only provides production by lease for oil wells, but production by well can be inferred on most leases) produced during a month. I assumed each well produced 30 days per month and 360 days per year. The reality is, I don’t have any way of knowing how many days these wells produced, but know that most probably produced somewhere between 300 and 360. For this reason, the 30-day and 360-day production rates are understated in many cases.
2) The percent declines for oil and natural gas show how the 360-day rate declines compared to the 30-day rate declines, so it’s not a true annual decline rate but it’s probably pretty close.
3) The TRC reports production as oil or gas and at this point I’m not positive which bucket it’s lumping natural gas liquids into (if any), which is a significant component in many of these counties.
Based on the above data, a well drilled into the oil/condensate window of the Eagle Ford will have an average 30-day production rate of 544 barrels of oil per day (BOPD) and 681 thousand cubic feet of natural gas today (Mcfpd) or 658 barrels of oil equivalent per day (BOEPD) (83% oil). The average 360-day rate was 269 BOPD and 381 Mcfpd or 333 BOEPD (81% oil). Again, I’m not really sure how liquids factors into this and I don’t want to make any assumptions until I find out from the TRC.
Karnes County: ConocoPhillips (COP), Marathon, (MRO) and Murphy (MUR) all have strong 360 day rates in Karnes, with EOG (EOG) surprisingly having steeper declines. I will caution to say that EOG has drilled a lot of wells on some of its leases and I was only able to gather data for them from the leases which had one well on it for the most part. Point being, I may have missed some of their better wells. Either way, Karnes County is looking very strong.
Other than Karnes, I didn’t want to draw too many conclusions from this data. The wells I have 360-day data for are the early wells these companies drilled, so one would expect completions to get better in some of the counties with fewer results. This post is meant to be a data piece for you guys and one that should give you some color on some of the results you’re hearing about.
While I don’t want you to read too much into the results by county, I prepared a table below detailing just that. It should give you somewhat of a compass for when you hear about results moving forward. De Witt and Lavaca were excluded from this table due to lack of data.
Eagle Ford Results by County