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Newfield Sizing Up Its Eagle Ford Assets

Newfield Exploration Co. said Monday its hunch that the Maverick Basin in the Eagle Ford Shale "would hold thick, high-quality" pay has turned out to be true as it released initial results from its Eagle Ford assessment program.

Since mid-2010 the Houston-based independent has drilled and completed 11 Eagle Ford wells on its 335,000-net acre position in Maverick, Dimmit and Zavala Counties in South Texas.

"All of our initial Eagle Ford assessment wells found light oil and confirmed an active petroleum system and producible oil and gas across a vast area," said Newfield CEO Lee K. Boothby. "We will continue with our active drilling program and, with continued success, be in position to substantially increase our investment levels in the play in the second half of 2011."

Newfield said the goals of its assessment program were to confirm the presence of hydrocarbons, the distribution of fluid types and the resource potential across the acreage and to satisfy all lease obligations while completing initial wells with a consistent fracture stimulation program.

All 11 Eagle Ford wells had lateral lengths of approximately 5,000 feet and encountered light oil with gravities ranging from 30 to 50 degrees by American Petroleum Institute standards. Newfield said it now believes that substantially all of its Eagle Ford acreage in the Maverick Basin is within the oil window.

"Newfield has more than 30 days of production on six of the wells completed to date," the company said. Peak gross production rates (24-hour) ranged 400-900 boe/d with an average of 630 boe/d. Thirty-day gross production averaged approximately 400 boe/d. Two recent completions have less than 30 days of production. The first well recently commenced production at approximately 860 boe/d gross, and the second is in clean-up following recent fracture stimulation.

Three of the 11 wells drilled had ineffective stimulations and/or mechanical issues, the company said. Although all were productive, results were not indicative of the full geologic or production potential.

Estimated ultimate recoveries (EUR) for wells drilled with more than 90 days of production are in the 200-400 Mboe/d range. Newfield estimates that oil in place on the company's acreage in the Lower Eagle Ford ranges from 40 to 60 MMboe per section. The company owns an approximate 85% working interest in 523 sections.

Late last year Newfield signed an agreement with a major service company to ensure that the necessary frack spreads and personnel are available to meet completion needs in the Eagle Ford in 2011 and 2012.

In addition to its assessment of the Eagle Ford, Newfield drilled two Pearsall Shale wells last year, and completions are planned in the first quarter. In late 2010 Newfield acquired operatorship and an additional 50% working interest in the Pearsall Shale from its co-venturer. As a result, Newfield now owns an approximate 85% working interest in all depths across its position.

Newfield entered the Maverick Basin in early 2010 through an acreage acquisition. The basin is prospective in multiple geologic horizons ranging from 3,000 to 12,000 feet, the company said. In addition to the Lower Eagle Ford Shale, other horizons include the Austin Chalk, Upper Eagle Ford, Georgetown, Glen Rose, Pearsall Shale and Sligo.

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