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Eagle Rock Energy Partners, L.P. Message Board

  • moneyonomics moneyonomics Nov 9, 2012 12:26 PM Flag

    Devon latest Cana view

    "...Moving now to the Cana Woodford Shale in Western Oklahoma. We brought 25 operated wells online in the third quarter at Cana, with average 30-day IP rates of 6.5 million cubic feet equivalent per day, including 483 barrels of liquids per day. These wells have average EURs of 9.3 billion cubic feet equivalent, making them some of the best wells ever drilled at Cana. These wells are much stronger than the tight curve we presented at our Analyst Day last April, which called for an IP of 4.4 million cubic feet equivalent per day and EURs of 8.3 Bcf equivalent.

    In contrast, the Cana wells we drilled during the second half of last year have underperformed our expectations. Because we are in a regional drought, we use smaller fracs to reduce water consumption. Industry data at that time suggested that we would not sacrifice much in a way of rates or recoveries. However, as we have brought these wells on and observed their performance through the first 3 quarters of this year, we were seeing that the smaller fracs significantly impacted well performance. We now believe the wells drilled in the second half of 2011 have EURs that are only about half of the Cana core type curve.

    In early 2012, we added surface water facilities that secured plenty of water for our Cana completion operations, mitigating the impact of the drought. This allowed us to return to our previous stimulation program. And while Devon's third quarter 2012 production from Cana increased 42% over the third quarter of 2011, our volumes at Cana are currently running about 8,700 barrels equivalent per day below our previous expectations, attributable to the performance of the wells drilled in the last half of 2011 and to some variation from plan and the timing of bringing on well pads. Even though it is short of our original forecast, we still expect sequential growth in the fourth quarter Cana production of more than 10%.

    We began the third quarter with 15 operated rigs at Cana. After initially moving 3 rigs to the Mississippian oil play in Oklahoma earlier in the third quarter, we later made the decision to move 5 additional rigs to the Miss and ended the quarter with 7 rigs at Cana. The Cana rigs were a logical choice for redeployment in the Miss because of close geographic proximity of the 2 plays makes for a relatively easy and inexpensive move. However, given the strong performance of the 2012 drilling program, it is likely we'll add additional rigs to Cana in 2013...."

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