Baytex Energy Joins Eagle Ford Shale’s Refrac Rally

Canadian operator Baytex Energy is joining the growing ranks of E&Ps working on refrac projects in the Eagle Ford Shale.

Producers in South Texas call them re-fracs, re-entries, re-completions and other variations, but their purposes are the same—to re-enter a declining well to pump new life out of it through modern drilling techniques.

Calgary-based Baytex Energy, which has a deep portfolio of Canadian light and heavy oil assets, got much deeper in the Eagle Ford Shale through a $2.2 billion acquisition of Houston-based Ranger Oil Corp. last year.

Some of the Eagle Ford’s largest operators—ConocoPhillips, Marathon Oil, Devon Energy, BPX and SilverBow Resources, among others—are extending their drilling programs with refracs in South Texas.

Baytex completed a lower Eagle Ford refrac on the Medina Unit No. 3H in the first quarter of 2024. Now, the company “is evaluating additional refrac opportunities to supplement our 2025 capital program,” Baytex reported in earnings after markets closed July 25.

Baytex’s acquisition of Ranger added 162,000 net acres and 741 undrilled locations across the Eagle Ford’s black oil, volatile oil and condensate windows. The Ranger assets complemented Baytex’s existing non-operated position in the Karnes Trough play.

After integrating Ranger’s assets last year, Baytex started submitting data on its first new horizontal wells in the Eagle Ford earlier this year, Texas Railroad Commission (RRC) filings show.

Baytex brought online 11 (10.7 net) operated lower Eagle Ford wells during second-quarter 2024, largely focused on the black oil window.

That batch included one of the company’s strongest performing oil-weighted pads yet: The three-well Pluto pad (Pluto A1H, B2H and D4H) generated an average 30-day peak production rate of 1,348 boe/d per well (1,161 bbl/d of crude oil, 104 bbl/d of NGLs, 500 Mcf/d of natural gas).

Baytex’s 2024 program also included four upper Eagle Ford wells; three were brought onstream in the first quarter and continue to deliver strong results, Baytex said.

The company continues to identify additional upper Eagle Ford and Austin Chalk drilling locations for future development.

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Attack the refrac

Refrac projects, where they make sense, are delivering promising results for operators.

Selecting the right candidate for a refrac is a very important step in the process, Baytex President and CEO Eric Greager had said during the company's first-quarter earnings call.

The Medina No. 3H well had declined to the point where it was producing less than 50 boe/d before the refrac. After the refrac, production jumped to more than 700 boe/d.

Greager said it boils down to completing a new nearly 5,000-ft lateral at a discounted price of approximately US$4 million.

How to refrac, or whether to refrac at all, comes down to a question of economics: In short, will the procedure net enough additional production to move the bottom line up?

Operators must account for the time and cost of doing a refrac, spacing concerns, existing well interference and a handful of other downhole issues.

According to analysis by Enverus Intelligence Research, producers can see between 20% to 40% of the average uplift from a post-refrac well compared to a new well.

But a refrac project can cost between 70% and 80% of the total cost of drilling a new well. Operators also still have to spend money on labor and input costs, like proppant and fluid.

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