DALLAS—The East Texas Eagle Ford may not be as big as the South Texas Eagle Ford, but the former is oilier, slightly more shallow and has comparable porosity, according to the CEO of a top player in the region.
“Probably the most significant difference between the East Texas Eagle Ford and the South Texas Eagle Ford is the East Texas Eagle Ford has a lower carbonate content and correspondingly somewhat higher clay in that section,” Hawkwood Energy CEO Patrick Oenbring told a full house gathered for Hart Energy’s A&D Strategies and Opportunities Conference & Workshop.
That makes for challenging completions.
However, the 6-year-old equity-backed company—along with its peers WildHorse Resource Development Corp. and Magnolia Oil & Gas—has developed completion recipes that work economically in the play, Oenbring said. But he admitted the company isn’t doing anything different than others in the industry for completion optimization, which has played a significant role in growing production across shale basins in the U.S.
“Our view is that the key completion variables for improved well performance are fluid type and volume, proppant volume and stage and cluster spacing,” Oenbring said before turning to the company’s Generation 3 completions. The so-called Gen 3 design uses more than 3,000 lbs/ft of sand and 3,500 gal/ft of fluid along with 150-ft stage lengths and 10 clusters per stage.
Compared to previous generations, the Gen 3 design has less gel, high proppant loadings, shorter stages and more clusters per stage, he explained. Most of Hawkwood’s 125-plus Gen 3 completions are in Burleson County, but the count in Brazos County is growing as the company has extended the play to the northeast. Currently, the company has 20 Gen 3 completions in Brazos.
The design has resulted in a more than twofold improvement in EURs in the play, from 42 boe per foot with Gen 1 completions in 2012-2014 to 90 boe when Gen 3 completions took hold in the play in 2016, according to Oenbring.
Gains have been made despite low activity in the play compared to more active areas such as the Delaware Basin. Between June 2015 and June 2018, the Delaware Basin showed a 60% EUR improvement with an average of 150 rigs running. During the same time frame, East Texas Eagle Ford saw a more than 130% EUR improvement with an average of eight oil rigs, Oenbring said.
The Denver-based company, which has interest in 165,000 net acres in Burleson and Brazos counties, Texas, is focused on oil in the East Texas Eagle Ford, where Oenbring says the economics are strong. Wells have a more than 50% rate of return.
But other oil targets are also on Hawkwood’s radar as it grows production, having already spud more than 20 new wells this year with a $300 million capital program. Plans are to exit 2018 with production of between 15,000 boe/d and 20,000 boe/d. But this could grow to between 30,000 boe/d and 35,000 boe/d in 2019 if the company opts to run three rigs.
Currently, Hawkwood has a two-rig, one frac-fleet program but plans to add a third rig next week, Oenbring said, as it continues with Gen 3 completion designs.
“While the Gen 3 is generally what we pump today, we still experiment and try to improve,” he added.
Hawkwood also has a refrack program underway for its old Gen 1 and Gen 2 wells. So far, three refrack jobs have been pumped, but the company is awaiting results.
WildHorse Resource Development Corp., which is also active in the play, has already experienced success with its refracturing program in Burleson and nearby Lee County, where it used Gen 3-style designs in areas where only Gen 1 legacy completions had been used. Earlier this year the Eagle Ford pure play reported its Gold 107 #1 refrack well reached a peak 30-day uplift of 388 boe/d (95% oil) on a 5,711-ft lateral, while its Fritsche 109 #1 refrack well came online at a peak 30-day uplift of 481 boe/d (88% oil) on a 5,387-ft lateral.
“We feel there is an opportunity to add some substantial value to our position with this refrack program on some existing wells,” Oenbring told conference attendees. “We’ve got north of 100 potential locations.”
But completion optimization is not the only area being eyed to add value. There could be upside in Hawkwood’s 140,000-acre Austin Chalk position.
Austin Chalk activity has centered on two play concepts: a gas condensate window south of Hawkwood’s acreage in Washington, southern Burleson and a small part of Lee County and an oil window to the north and west of Hawkwood’s acreage.
“The play concept in this area to the south is targeting ungrained, structurally quiet areas to be developed with high-intensity fracks,” Oenbring said. “To the north and west of us, the concept is more in-fill play in the oil window. In this area wells target non-depleted areas and deploy relatively modest size fracks, considerably smaller than our Eagle Ford fracks.”
Strong wells have been drilled in both areas, he said.
The company has already been approached by others wanting to farm into its acreage, Oenbring said. But Hawkwood is taking time to evaluate the situation first—updating maps and petrophysical models with technical information—before deciding which moves will work to its economic advantage.
Options include drilling wells itself or farming out acreage. The company may drill a well, or two, itself toward year-end but hasn’t made a firm decision yet, Oenbring said.
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The company also said it expects to generate substantial free cash flow in 2018, allowing it to initiate a dividend in the first-quarter of 2019.