Houston-based Magnum Hunter Resources Corp. plans to spend a good chunk of its 2011 drilling and operational budget not far from home -- in the Eagle Ford Shale play of South Texas. In outlining recent drilling results there the company emphasized that it's learning as it goes.
"As we continue our development activities in the Eagle Ford Shale of South Texas, we are learning ways to improve our overall results," said CEO Gary C. Evans. "The Southern Hunter #1-H [well] is an example of that learning curve. What has gotten us excited from this new completion other than a production rate exceeding 1,200 boe/d is the flowing tubing pressure, which is unlike any other wells we have witnessed in this region."
The company's capital expenditure budget allocation for the Eagle Ford Shale oil window for fiscal year 2011 has been established at about $65 million, representing 43% of Magnum Hunter's total anticipated drilling and operational capital budget of about $150 million. Magnum Hunter said it plans to participate in 14 gross Eagle Ford wells (eight net wells) during fiscal year 2011.
Magnum Hunter is active across about 50,000 gross acres in the Eagle Ford, mainly in the Atascosa, Gonzales and Lavaca counties of Central and South Texas. Atascosa and Gonzales are known for oil while Lavaca County is known for dry gas/natural gas liquids.
"Our company exited fiscal year 2010 with daily production of 2,732 boe/d," Evans said. "Our goal is to more than triple this exit rate by the end of 2011. As all unconventional resource plays continue to evolve around the country, the energy industry is improving its results with a combination of technology, ingenuity and will power."
The company's first well in the Eagle Ford oil window in Gonzales County was the Gonzo Hunter #1-H, which was spudded last June and was drilled 9,750 vertical feet plus 4,365 horizontal feet. After hydraulic fracturing with nine of the 11 stages deemed successful, the well had an initial production rate of 605 boe/d and 412 b/d of water on Oct. 11. The well is currently flowing to production without artificial lift at approximately 197 boe/d and 43 b/d of water, Magnum Hunter said. Economic ultimate recovery from the well is estimated at 362,000 boe. Magnum Hunter is the operator and owns a 50% working interest.
Magnum Hunter's Southern Hunter #1-H is about seven miles southwest of the Gonzo Hunter #1-H and was spudded on Oct. 14. It was drilled 11,779 vertical feet plus 4,460 horizontal feet. After a 14-stage frack job, flowback commenced Jan. 7. The well is flowing to production at about 1,335 boe/d and 212 b/d of water on a 13/64-inch choke with flowing tubing pressure of 4,300 psi.
The company is not alone in its focus on the Eagle Ford. Earlier this week Newfield Exploration Co. announced successful results in the play and reiterated its commitment to development there (see Shale Daily, Jan. 11).
Based on current production characteristics, the company said it believes the well's estimated ultimate recovery to the 100% working interest to be in the 500,000 boe area. Magnum Hunter is the operator and owns a 50% working interest.