The graphics below summarize an up-to-date assessment of the the economics of the play and the potential recoverable reserves. The well cost of $12 million is based on the development cost for an offset to the recent Goodrich Smith 5-29H well that cost $13 million. AFE's based on EOG's drilling times are $10-11 million.
The decline curve variables are based on current and historic producers. The Encore TMS producers provide 4-5 years of production life to assess the B-factor. Estimates of 350 bbl/ac-ft and a 6% recovery factor were used. EOG has recently raised the recovery factor in the Eagle Ford from 6% to 8%. With a recent initial test exceeding the Crosby 12H, IP30 ranges were increased. The Crosby 12H continues to track on an EUR curve of 800-900 MBOE.
An IRR of 20%, as an economic cutoff for the play, equates to an EUR of 410 MBOE. On average, that would equate to 62' of pay (dashed line on map below). That boundary encompasses 2.66 million acres and, by our current estimate, represents 9.175 billion barrels of reserves.
|TMS play boundary and active wells and units (Source: SONRIS and MSOGB)|
|Estimated play reserves|
|Economic input variables|