Eagle Ford Basin | February 2020
Field Overview
The current WTI price is $31.27/bbl. A heavy shale play, the Eagle Ford basin is located east of the Permian, stretching from Dallas to San Antonio. Primarily a gas field with smaller oil plays, it boasts proven reserves of 3.37 billion bbl of oil and 2.5 TCF of gas.
State Drilling Statistics
Active Drilling Rigs in Basin- 68
Total Rigs in Texas- 400
Total Rigs in United States- 790
Total U.S. Rigs down 24% YTD
Eagle Ford Top Producers
Top Gas Producer- XTO
Top Oil Producer- EOG
Financial & Economic Updates
Only 5 Shale Drillers Are Still Profitable At $31 Oil
- Most shale oil wells drilled in the United States are unprofitable at current oil prices, Rystad Energy has warned. The Norwegian consultancy said, as quoted by Bloomberg, that drilling new wells would be loss-making for more than 100 companies.
- Just five shale drillers—Exxon, Chevron, Occidental, and Crownquest—can drill new wells at a profit at $31 per barrel of West Texas Intermediate.
- The situation is more positive for drilled but uncompleted wells, according to Rystad. The consultancy said yesterday that as much as 80 percent of DUCs in the U.S. shale patch have a breakeven price of less than $25 per barrel of WTI. Yet this is dangerously close to current prices.
State Highlights
Lonestar Resources announces bolstered hedge positions
- Lonestar Resources US Inc. (NASDAQ: LONE) (together with its subsidiaries, “Lonestar,” “our” or the “Company”) announced that it has entered into a series of hedge transactions which considerably enhance the certainty around crude oil prices, natural gas prices, and interest rates.
- For the balance of 2020 (“Bal ’20”), Lonestar has a total of 7,453 barrels per day of crude oil swapped at an average West Texas Intermediate (“WTI”) price of $57.09 per barrel. For the balance of 2020 (“Bal ’20”), Lonestar has a total of 20,000 MMBTU per day of natural gas swapped at an average Henry Hub (“HH”) price of $2.55 per MMBTU.
- Lonestar has recently taken steps to significantly bolster its price protection through the end of 2021 by adding to the Company’s existing hedge book. For the calendar year 2021 (“Cal ’21”), Lonestar now has a total of 7,000 barrels per day of crude oil swapped at an average West Texas Intermediate (“WTI”) price of $50.40 per barrel. For the calendar year 2021 (“Cal ’21”), Lonestar now has a total of 27,500 MMBTU per day of natural gas swapped at an average Henry Hub (“HH”) price of $2.36 per MMBTU.
U.S. Shale Drillers Ask Service Providers For Major Price Cuts
- U.S. shale oil companies have asked oilfield service providers for price cuts of at least 25 percent as they grapple with tanking oil prices and pessimistic oil demand forecasts, Reuters reports, citing industry executives and a letter sent to oilfield service companies.
- Shale drillers have made their spending plans based on oil prices of between $55 and $65 a barrel of West Texas Intermediate, Reuters noted, so the recent dive benchmarks took shook them to the core. WTI was trading at $31.78 a barrel at the time of writing with no prospects to go much higher any time soon.
- This is particularly bad news for producers who have not hedged their future production at higher prices, according to analysts, and these will soon sink into the red. In this situation, their only chance for short-term survival seems to be oilfield service providers once again cutting their prices as they did during the 2014-2016 price crisis.
- Reuters quoted Parsley Energy’s chief executive David Del-Osso as saying the company had sent a letter to oilfield service companies asking them “to reconsider your pricing” and offer Parsley price cuts of at least 25 percent.
Top Gas Producers
| Rank | Company | Production (MMscf / Month) |
| 1 | XTO | 33,421 |
| 2 | Lewis Petroleum | 18,549 |
| 3 | EOG | 15,493 |
| 4 | Chesapeake | 13,473 |
| 5 | BP | 12,978 |
Top Oil Producers
| Rank | Company | Production (STB/Month) |
| 1 | EOG | 7,018,893 |
| 2 | Chesapeake | 3,203,166 |
| 3 | Marathon | 3,054,656 |
| 4 | Burlington | 2,763,815 |
| 5 | Murphy E&P | 1,329,081 |
Refining
Texas Gas Production
Texas Oil Production
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