Super independent ConocoPhillips' estimated resource base in the Eagle Ford Shale is 2.5 billion bbl of oil in place, much more than a previous forecast of 1.8 billion, management said Thursday.
The update was provided during an investor presentation on Thursday in New York City.
"ConocoPhillips is set for growth," said CEO Ryan Lance. "Beginning this year, we will be growing production and margins across our diverse asset base, and allocating 95% of our annual capital expenditures to growth projects and programs with margins that are higher than our average margin today."
The Houston-based operator's goal is to deliver 3-5% compound annual growth in production and margins. "We believe we have the asset base, technical capability, world-class workforce and financial strength to deliver on our unique value proposition," Lance said.
The increase in estimated Eagle Ford reserves is based on the company's "prime acreage position and technical knowledge." Eagle Ford output now is forecast to increase from current volumes to more than 250,000 boe/d by 2017.
"ConocoPhillips' wells in the Eagle Ford have the highest oil rates per well and are leading the industry in value," said the CEO. "This is attributable not only to the fact that we are in the best part of the play, but also to our relentless focus on technical innovation and drilling and completion cost efficiencies."
Innovations and efficiencies are being transferred across the portfolio in the Bakken Shale and Permian Basin, the Niobrara formation, Canada oilsands and overseas, Lance said.
ConocoPhillips moved from oil major to pure-play exploration and production (E&P) company in 2012. During the final three months of 2013, production from the Eagle Ford and Bakken shales, and the Permian Basin, was 31% higher year/year (see Shale Daily, Jan. 31). Organic reserve replacements in 2013 for worldwide operations rose 179% on reserve additions of nearly 1.1 billion boe.
Since 2009, ConocoPhillips has added 6.7 billion boe of resources, which include four large U.S. Gulf of Mexico discoveries: Tiber, Gila, Shenandoah and Coronado. In addition to worldwide offshore prospects, the operator has conventional exploration in Norway and Indonesia. Unconventional exploration also is taking place in Poland and Colombia.
Since becoming the biggest U.S. independent in 2012, ConocoPhillips has generated proceeds of $12.4 billion from noncore asset sales. Over the next several years, the capital program is expected to be about $16 billion/year with an organic reserve replacement target of more than 100%.
"We have the talent and technical capabilities to operate globally in any resource trend," Lance said. "Our strong balance sheet provides the financial flexibility to withstand business cycles and to invest in substantial projects. We have transformed the company into a successful independent E&P company and we have an exciting future ahead."
First quarter results are to be issued on May 1.