Friday, June 29, 2012

Thursday, June 28, 2012

Encana Acreage

The map below was constructed from the acreage map presented at Encana's Analyst Day (6-21-12).  The red polygons represent a rough estimate from their presentation.  It illustrates their acreage position relative to the base of TMS structure.  They have established a strong position in the center of the higher resistivity trend with weighting towards the oil window.  They appear to have picked up two large contiguous "outlier" tracts. I believe that the lessees are Weyerhaeuser (east) and Blackstone Minerals (west).
Encana acreage (red; source Encana Analyst Day 6-21-12), TMS Structure (black lines), TMS higher resistivity area (blue dash lines), Lower Cretaceous Shelf Edge (dark blue line)

Wednesday, June 27, 2012

Tuesday, June 26, 2012

The Financial Radar

It appears that the financial sector has taken notice of the TMS and put the play on their radar. 
Our top visitors in the month of May:
Company- Visits - Page Views
Jefferies - 48 - 313
Williams - 68 - 178
Pritchard Capital - 35 - 79
Bank of America - 70 - 76

The Regulars:
Anadarko - 23 - 62
Encana - 22- 38
Petroquest - 10 - 34
Sanchez - 10 - 29
Indigo - 9 - 29
Devon - 11 - 20

A Future Player??
Chevron - 26 - 85

Monday, June 25, 2012

Goodrich's CEO, Robert Turnham, discusses the TMS

Goodrich's CEO, Robert Turnham, discusses the Tuscaloosa Marine Shale and the Eagle Ford Shale.

TMS Completions: Frac Stages

Eight horizontal wells have been fracked to date.  The chart below illustrates the trend through time.

Friday, June 22, 2012

EOG Permit - Bayou Twisty

EOG has permitted the Dupuy Land Company #1 in Avoyelles Parish. The well is permitted as a vertical well with a PTD of 11900'.  That TD should put the bottomhole approximately 220' below the base of the TMS.  I understand that EOG plans to core the TMS and use this wellbore as a monitoring well for a future adjacent horizontal well.  This should provide a nice datapoint for the west side of the TMS-East.

API: 1700926042    Serial #: 245050

TMS wells; EOG Dupuy #1 (red star)

Thursday, June 21, 2012

Frac Job: Stages vs IP

The Devon Weyerhaeuser 14-1 frac job is in progress.  The recent Anderson wells with 30 stages produced over 1000 boepd.

Encana's Analyst Day - Slides and Commentary

Jeff Wojahn, Encana's EVP & President for the USA Division presented two slides on the Tuscaloosa Marine Shale today at their Analyst Day.
Here are the slides along with my comments.

Source: Encana's Analyst Day - USA Division - Slide 3
Encana has increased their acreage total to 355,000 acres. The company has assembled a significant position in the oil window. 

I believe that this is the first time that Encana has released play reserves.  9.4 billion barrels in place is signficant.  They did not present estimated recoverable reserves on a play level.  Using a 6% recovery, estimated reserves total 564 MMBOE (EOG has reported 6% for the Eagle Ford play). That equates to 1.589 MBOE/Acre.  In a 1000 acre unit, that equates to 1.589 MMBOE.  Based on their estimate of 1250 wells, reserves per well equate to 451 MBO.  In their presentation, they state 730 MBO as a target EUR.  The well estimate along with the total net acres presents one well drilled per 284 acres.  EOG has recently reported spacing in the Eagle Ford between 65-90 acres.

During the Q&A session, they stated that their RPH technological approach will get them to very attractive economics.  They state that they have yet to focus on reducing well costs. It's a target for the 2nd half of 2012. The target this year is $15M well costs for 7500' laterals.  The Haynesville experience will assist with significant cost reduction in the future.

Throughout the presentation they mention joint venture partners.  They did not announce a TMS partner, so we must conclude that a deal has not been completed.  In addition to the Shell rumor, it recently has been rumored that Exxon/XTO might be involved.  One partner for the TMS and Eaglebine makes sense. Stay tuned.

They confirmed that the TMS players are sharing data which is smart.  The synergy between these companies will shorten the learning curve.  Our industry has come a long way the past ten years in this area.

They state that 2012 will continue as a 2 rig program.  The 30 day IP's for the Anderson wells are impressive.

Source: Encana's Analyst Day - USA Division - Slide 4
The "R&D" effort continues to see improving results.  It takes time to optimize drilling and completion designs.  They are flowing the wells at restricted rates to prevent damage to the completion.  They state that they've identified the best zone in the TMS for building curve and landing the lateral.  Eliminating one casing string saves big dollars.  At $100 per barrel, their parameters present attractive economics.  In the Q&A session, they stated that they target a supply cost of $40/barrel.

The "Rate vs Cum" chart illustrates that the Anderson wells should yield better results than the prior wells. Their target of 730 MBO/well looks achievable.

Congrats to the Encana team.  To date, they've been the play leader with regards to acreage acquisition, drilling, frac design, and results.  The TMS appears to finally be gaining the respect it deserves.

Thursday, June 14, 2012

Who Shot J.R.?

Well if J.R. Ewing made his comeback last night, I guess it's time to start blogging again.  Lookout, the folks on the "new" Dallas series are already talking about fracking, gas hydrates, and alternative energy.  I have a feeling that the "great frac debate" will playout under Southfork Ranch.

I would like to thank everyone who participated in the fundraiser.  You guys get it.  I would like to especially note G.M. who donated $10,000 after closing a large minerals sale.  Give to charity instead of the IRS!  Indigo Minerals, American Midstream, Caruthers, and Bobby H. really stepped up to the plate.  Bobby H. is our first "two time" donor. Thank you for your leadership.  I enjoyed the many emails from many of you supporting the cause.  As for Joe A. who cried "industry conspiracy" and Jonathan G. at Keller who declared "the blog might be a scam to raise money for charity", you guys are thinking too hard.  It wasn't that complicated.  Pay forward a little value to a good cause.

The combination of several companies suggesting a subscription service and the limited number of donors have led me to pursue a plan for a monthly Scout Report subscription and a quarterly "play book".  These are under consideration.

If I missed anyone below, let me know. The mailed checks take a little time to process.

The Tuscaloosa "Wall of Fame"

Now for some up-to-date information.  Both of the Anderson wells appear to be holding up.  Surpassing the 1000 boepd threshold in both sets the bar a little higher.  Goodrich definitely put their 5% W.I. to work in the "P.R." space the past few weeks.  Maybe the "2nd mouse" gets the "cheese" and the "press".  The press is good for the play.  Many financial firms are starting to take notice.  This is all good for the TMS.

The Anderson wells once again prove that "more is better".  Longer laterals and more stages produce better results.  No secret here.  It will be interesting to see the frac designs for the five wells currently drilling.  I expect to see Devon greatly increase their frac sizes.