7 E&Ps Fighting Through 2015 Low Commodity Prices
As third quarter earnings season starts we take a look at where some operators are in their drilling and completion programs and begin to get a peak at 2016 expectations. Check back for updates as operators and oilfield service companies update their positions in the current environment.
Antero Resources Expects 25% Production Growth
Antero Resources (NYSE: AR) continues to cover production with 94% covered for the 2015 year and looking ahead to 2016 they expect 25% to 30% production growth having 1,793 MMcfe/d hedged at $3.94/MMBtu which is 100% of the targeted midpoint of 1.785 Bcfe/d. They have reduced well costs in the Marcellus and Utica by 16% and 18% by reducing service costs and drilling and completion efficiencies. You can see our earlier write-up on Antero on OilPro.
Noble Energy Digests Rosetta Resources Assets
Noble Energy (NYSE: NBL) has been exceeding expectations after the acquisition on Rosetta Resources driving down the number of days from spud to rig release by 35% to under 9 days compared to the 2014 average. In 2016 they have the ability to maintain production volumes with about a 50% reduction in capital compared to 2015 and have plans to focus drilling activity in the DJ basin and Texas plays. We covered the Noble acquisition in a SeekingAlpha article and our Oilfield Insights analysis.
Hess Corporation Leads Bakken Operators
Hess Corporation (NYSE: HES) have been realizing cost reductions from the application of lean manufacturing and supply chain cost savings seeing drilling and completion costs come down to $5.6 million in the Bakken during the second quarter of 2015 compared to years end 2014 where the well cost was around $7.1 million. They have also been using their experience in the Bakken to drive down costs in the Utica where they will be running one rig for the remainder of the year. Read an earlier write-up on OilPro.
Murphy Oil Releases Another Rig in Q4’15
Murphy Oil (NYSE: MUR) has reduced its 2015 budget by 34% from their 2014 level and recently increased their production guidance to 200 to 208 MBoepd from the previous guidance range of 195 to 207 MBoepd. They have estimated to bring 36 wells online in the third quarter and 25 in the fourth quarter of 2015. They are running 4 rigs in the Eagle Ford through Q3’15 dropping one in the fourth quarter. Murphy is also testing higher sand volumes in the Karnes area at about 2,690 pounds per foot. Read more about Murphy Oil on OilPro.
EXCO Resources Enhances Completions with 90% More Proppant
Exco Resources (NYSE: XCO) shared their plan for the second half of 2015 which will be targeting 30% to 35% returns from 3 rigs drilling 11 gross wells in the Haynesville and bringing 10 gross wells online. Their completions will use up to 90% more proppant then they did in 2014, using up to 2,700 pounds of proppant per lateral foot for completions. They are monitoring refrac tests and planning to start a program in 2016. You can find out more in our LinkedIn article.
Pioneer Natural Resources Reveals Lower Well Costs
Pioneer Natural Resources (NYSE: PXD) is currently running 12 rigs in the Permian and brought 43 wells onto production in the second quarter. They have plans to add two horizontal rigs per month in Northern Spraberry/ Wolfcamp through the first quarter of 2016 and two horizontal rigs in the Eagle Ford during Q1’16. Well costs are down 20% to 25% from 2014 levels and are expecting to see savings of greater then 30% by early 2016 compared to 2014. Read our Pioneer analysis on OilPro.
SM Energy Delays Completions until 2016
SM Energy (NYSE: SM) is delaying completions and is anticipating to finish the year with 110 drilled but uncompleted wells resuming completion activity in 2016. For 2016 they have already expressed having a budget around the $1 billion mark and running 7 to 8 rigs similar to levels in the second half of 2015. You can read more on OilPro.
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