American Oil and Gas Reporter - December 2022 - 58

SpecialReport: Eagle Ford Playmakers
giving, " Gates states. " The industry has
had a love-hate relationship with the
Austin Chalk over the years because of
the natural fractures in the rock. If you
only played the natural fractures, you
had a miserable life. "
Ageron, however, is now employing
multistage fracs on its Austin Chalk wells,
which Gates claims has made production
consistent.
" In fact, those first two wells paid out
in their first four months on line, " he
claims. " New areas may emerge, but
Webb County is the best area so far.
There is an estimated 70 trillion cubic
feet of dry gas reserves in Webb County
alone. These wells do not produce a lot
of water, which helps expenses. These
are natural flowing dry gas wells. "
Two-Rig Program
Ageron is running two rigs, drilling
both the Austin Chalk and Eagle Ford,
according to Gates. " We typically drill
two wells per pad, and we often have
two pads drilling side-by-side, " he continues.
" Cost for drilling and completion
is about $12 million per well. "
He says Ageron is drilling approximately
7,500 lateral feet in the Austin
Chalk, while its laterals in the Eagle Ford
are closer to 10,000 feet.
" The Eagle Ford is not as prolific as
the Austin Chalk, " Gates offers, " but the
Austin Chalk is harder to drill. It has
high pressure and can be tricky. There is
250-300 feet pay in the Austin Chalk. "
When Ageron started, it had 300 feet
between frac stages, according to Gates.
It is now putting 180 feet between stages
with 20-foot space clusters and eight or
nine clusters per stage.
" Then we hit it with a lot of sand, " he
adds. Gates says the company is pumping
3,000 pounds of 100-mesh sand and 80
barrels of water per lateral foot.
Most of Ageron's gas is going to Mexico
because of increased industrial demand
in that country. " Mexican demand can
be inconsistent. For example, factories
there shut down for few days recently.
But we can also get our gas to Houston
or wherever it is needed, " he says.
Gates says Ageron also plans to conduct
its first re-fracs in the oil window in McMullen
County next year.
" These are old wells that were not
highly stimulated, so production is weak, "
he details. " We believe the reservoir has
more potential. Can we get two-thirds of
the original production? We do not have
a track record to know, but we are going
to find out. We have plenty of confidence
that there is a lot of oil in the ground. "
After closing on a $1.8 billion acquisition of Validus Energy, Devon Energy Corp. plans to
run four rigs and one completion crew on its 82,000 net acres in the Eagle Ford in the
fourth quarter, bringing more than 20 wells on line. The Validus Energy acquisition
includes 42,000 net acres adjacent to Devon's existing leasehold, with 350 repeatable
drilling locations in the core of the Karnes Trough oil window along with 150 high-quality
refrac candidates.
58 THE AMERICAN OIL & GAS REPORTER
Premier Acreage Position
Devon Energy Corp.-which has operations
in a number of the nation's top
basins including the Delaware, Williston,
Powder River and Anadarko, as well as
the Eagle Ford-announced on Sept. 28
that it had completed its previously announced
acquisition of Eagle Ford operator
Validus Energy for a total cash consideration
of $1.8 billion.
According to the company's announcement,
the acquisition secures a premier
acreage position of 42,000 net acres
(90% working interest) adjacent to Devon's
existing leasehold in the basin.
Current production from the acquired
assets is approximately 35,000 boe/d and
is expected to increase to an average of
40,000 boe/d over the next year. The
transaction also adds 350 repeatable
drilling locations in the core of the Karnes
Trough oil window along with 150 highquality
refrac candidates, according to
Devon's President and Chief Operating
Officer Rick Muncrief.
The highly economic inventory positions
the company's Eagle Ford assets to
sustain its high-margin production and
free cash flow generation for several
years, Muncrief says.
" We took important steps to opportunistically
strengthen the quality and
depth of our assets portfolio by closing
on two highly accretive bolt-in acquisitions
(including the Validus Energy purchase
in the Eagle Ford) that further enhance
our ability to deliver sustainable longterm
results, " Muncrief stated in the Devon's
third-quarter earnings report. " As
a result of the immediate value that these
acquisitions create, we are revising our
financial and operational outlook higher
for the fourth quarter. "
Devon projected a 6% increase in
production companywide in the fourth
quarter compared with the equivalent
quarter last year.
Devon says it plans to run four rigs
and one completion crew across its 82,000
net acres in the Eagle Ford in fourth
quarter. It expects to bring more than 20
wells on line in the fourth quarter. Devon's
Eagle Ford Production averaged 39,000
boe/d (49% oil) in the third quarter. ❒

American Oil and Gas Reporter - December 2022

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2022