Tuesday, April 29, 2014

EXCO Q1 2014 Results

This afternoon, EXCO Resources released its quarterly earnings report with an update on the company's progress in the Haynesville.  Below, I've noted a couple of key points with the text of the update below.
  • In Q1, EXCO drilled 13 gross wells but completed only two, ten of these are multi-well pad wells in DeSoto Parish that will be completed in Q2.
  • For the rest of 2014 in DeSoto, EXCO plans to develop seven of its 36 undeveloped units by drilling 34 gross wells. 
  • The company will start drilling its first cross-unit wells in Louisiana, including 5,000 to 8,000 foot laterals, in DeSoto later in the year.
  • In the Shelby trough area of TX, where EXCO is still focused on testing its leasehold, the company plans eight gross wells with longer laterals and a restricted flowback procedure to try to find the "secret sauce" for that area.
  • EXCO is experimenting with lowering the line pressure in its Holly Field gathering pipeline from 1,250 psi to 980 psi, which is leading to an 8-10% production uplift.

Full text of update:
In the Haynesville shale during the first quarter 2014, we operated three drilling rigs focused on manufacturing in our core area in DeSoto Parish, Louisiana and two drilling rigs focused on appraisal, testing and delineation in the Shelby area of East Texas. We drilled 13 gross (6.0 net) operated wells during the quarter and completed 2 gross (0.7 net) wells during the quarter. As a result of our multi-well pad drilling and completion operations, we had 10 gross (4.3 net) operated wells in the Haynesville shale that were drilled and waiting on completion at the end of the first quarter 2014 which are expected to be turned-to-sales during the second quarter 2014. In DeSoto Parish, we have 42 developed units and 36 undeveloped units. Our plans for 2014 are to develop seven of these units which include drilling 34 gross (17.3 net) wells. We have also initiated drilling operations on our first cross-unit development in DeSoto Parish that includes drilling 5,000 to 8,000 foot laterals in 5 wells. In the Shelby area, our plans for 2014 include an 8 gross (3.8 net) well drilling program consisting of longer laterals, a modified completion design and a more restricted flowback procedure. We will utilize the results from these wells to determine our future development plans in the Shelby area which includes 290 drilling locations.
We are encouraged by the early results of our base production initiatives which have flattened our decline since we have lowered the line pressure and installed artificial lift. In the first quarter 2014, we initiated a pipeline pressure reduction project by working with our midstream provider and lowered the gathering line pressure from 1,250 psi to 980 psi in a portion of our Holly field in DeSoto Parish. The initial results for the set of wells included in this test show an 8-10% production uplift as a result of the reduction in line pressure, and we will continue to evaluate the long-term impact of the lower line pressure. We are currently studying interim lateral compression options and full field compression options to enhance our base production efficiency.     

1 comment:

Anonymous said...

Robert, when Exco refers to their Texas Haynesville as "Shelby" they are not referring to Shelby County as much as they are the "Shelby" area. The fact is that their Texas Haynesvile Rigsrigs are in San Augustine county.