Producers reporting their operations results in 2Q2013 over the past week indicate no let-up in the work to be done, with liquids/oil growth from the Eagle Ford funding forays into the Tuscaloosa Marine Shale (TMS).

EOG Resources announced record production from an oil well in the Eagle Ford Shale in South Texas. At the end of June, EOG’s Eagle Ford net production was about 173,000 boe/d.

“EOG’s Eagle Ford acreage continues to prove that it’s the premium horizontal oil position in North America,” said CEO William Thomas. “During the second quarter, we consistently completed strong wells in both the eastern and western portions of our acreage, that drove our record production results.

“In addition, drilling and completion improvements continued to drive down well costs. As a result, we’ve lowered the average completed well costs in the Eagle Ford from $6 million to $5.5 million, and we’ve increased the number of wells we plan to drill this year from 425 to 440.”

Sanchez Energy Corp.‘s output is booming in the South Texas play, with production in 2Q2013 of 703,000 boe, a 98% sequential increase and 799% higher year/year. It also has gained entry into the Tuscaloosa Marine Shale.

“Our second quarter of 2013 was marked by substantial reserve, production and revenue growth as a result of increasing well count, well performance, results of tighter spacing pilots, and the closing on June 1 of our acquisition [see Shale Daily, June 5],” said CEO Tony Sanchez. “Specifically, in our Cotulla area we have increased production volumes from approximately 4,500 boe/d when we announced the transaction to a current rate in excess of 6,000 boe/d.” Current daily production exceeds 12,000 boe/d, and there are 26 wells either drilling or in completion, the company said.

Revenues were 90% higher than in the first quarter and jumped 835% from a year earlier. Proved reserves at the end of June were 43 million boe, an increase of 103% from the end of 2012 and 187% from 2Q2012.

Rosetta Resources Inc., a leading Eagle Ford operator, has adopted what it says is an innovative and more efficient multi-well pad drilling strategy on its Briscoe Ranch acreage: column development.

During a 2Q2013 earnings conference call, COO John Clayton explained. “At Briscoe Ranch we are now drilling eight wells from a pad; however, these eight wells are not all in a single row of eight wellbores like our three wells from a single pad were,” he said. “Instead, they are four wells in one row and four wells in the adjacent row. In other words, the area drilled is a rectangular box that is four wells wide by two wells long.”

Clayton said Rosetta’s technical teams developed the drilling technique in order to minimize the amount of production that would have to be interrupted if the company subsequently had to drill the second row of wells at a later date after the first row had already been producing.

Meanwhile, data from TMS in Louisiana and Mississippi continues to strengthen, bringing new entrants to the play.

Development activity is gathering pace for Sanchez and Goodrich Petroleum Inc. executives said last week. Goodrich is about to close on an acquisition that would more than double its footprint in the play, while Sanchez announced deals worth $78 million that give it entry.

Goodrich plans to reallocate $15 million of capital from the Eagle Ford Shale to the TMS, CEO Gil Goodrich said last week. “With continued success, we expect further acceleration of our TMS development activities in 2014,” he said. “Clearly our near-term focus is, as we think it should be, on the TMS as recent results and our pending acquisition provide a tremendous catalyst for production, reserve and NAV [net asset value] growth. Given the current state of the play, we fully expect further acceleration of TMS activity as we move forward and into 2014.”

Goodrich acquired some TMS acreage in July from Devon Energy Corp. (see NGI, July 29). “First, our footprint in the play will more than double from 135,000 net acres to approximately 320,000 net acres,” the CEO said. “Second, the additional acreage materially expands the range, diversity and balance of our overall position in the TMS. Third, the combination of the present value of the proved developed producing reserves associated with the seven producing wells and upon closing the corresponding $18 million increase in our borrowing base under our senior credit facility allows us to complete this acquisition with negligible impact to our current liquidity.”

COO Robert Turnham said well costs are coming down; a recent Smith well was drilled and completed for about $13 million. “We continue to believe we can drive our costs down over time to the $10 million range through better drilling efficiencies, pad drilling, zipper fracks and a more competitive service company environment.” TMS production rates are “very attractive,” and the production stream is 90-96% black, sweet oil, for which Goodrich receives “north of $100/bbl.” Natural gas has a high Btu content and yields 80-100 bbl of natural gas liquids/MMcf produced.

CEO Tony Sanchez said last week his company has been watching the TMS evolve and assessing its potential for almost three years. “With recent well results trending toward 600,000 and 800,000 bbl EURs [estimated ultimate recoveries], and IPs [initial production rates] ranging from 1,000 to 1,500 b/d, well costs trending down toward $12 million, the core of the TMS has the potential to be a world-class play,” he said.

Sanchez said TMS is an extension of the same geology found in the Eagle Ford, which his company knows well (see related story). The risk-reward balance in the play has shifted in recent weeks, given encouraging well results being reported by Goodrich as well as Encana Corp., Sanchez told analysts. “We think that right now the risk is fundamentally shifted to repeatability, to consistently getting well costs within a range that generates strong rates of return that are comparable to what we could get in other basins, including the Eagle Ford,” he said.

Big acreage in Texas carried Exco Resources Inc. in 2Q2013, with acquisitions in the Eagle Ford and Haynesville shales providing the foundation for future expansion, the management team said last week. Through joint ventures in July with Kohlberg Kravis Roberts & Co. LP, Harbinger Group Inc. and BG Group plc, Exco paid Chesapeake Energy Corp. $1 billion for 55,000 net acres in the Eagle Ford and 9,600 net acres in the Haynesville (see NGI, July 8). Exco’s adjusted earnings were $90 million (10 cents/share) for 2Q2013, a 19.6% decrease from a year ago when it earned $112 million (5 cents).