"In East Texas, at El Halcón, production grew from a few hundred barrels of oil equivalent per day in January to an average of over 7,000 barrels per day in the fourth quarter of '13. We expect that trend to continue. We'll run 3 or 4 rigs there for all year. We expect to spend about 40% of our drilling and completion CapEx in 2014 in El Halcón.
We've exceeded our goal of 100,000 Tier 1 net acres in the play. We are confident that all of our acreage is in core of the play. We've increased the El Halcón type curve EUR estimate by 22% to a little over 450,000 barrels of oil equivalent per well. This is based on wells that were spaced a minimum of 750 feet apart and completed with over 1,200 pounds of proppant per lateral foot. So what that says is we've been testing different completion designs, different spacing, and we're getting close to zeroing in on what we think is the most appropriate situation to drill these wells in. Testing is underway on a number of completion design variations to reduce costs and increase performance, and we're working to find the most economic completed lateral length. We spend a lot less money drilling shorter laterals and, sometimes, the longest lateral is not the answer because you lose a little efficiency on your frac job.
The exciting thing that's going on there, it's all been exciting, but results from step-out wells drilled to the south towards the Burleson County look to be the best wells in the play. They're slightly deeper, slightly higher pressure, hopefully slightly more prolific. We expect well cost to continue to decrease at El Halcón. We've had some wells that were dramatically less money. We'll just have to see how that goes. We can say for sure that El Halcón is the real deal."
Thats a positive write up for Halcon thats for sure. However the issue with the whole East Texas "Eavglebine" is that the geology varies widely from Burleson/Brazos, across Grimes and Walker/Madison. Depth, Formation Thickness and oil content are all very different. The part of the press release you didnt post was where it mentioned Halcon is selling their assets in Grimes, Walker, Madison and Leon as they consider them non-core assets. Well that and they need the money to reduce debt. The issue I have heard from most who looked at the ZAZA and Samson data room info was that the Eaglebine wasnt as thick in Eastern Grimes and into Walker County Interesting thing is everyone agrees that EOG is one of the best drillers out there and willing to step out and try things others wont. They are rumored to have had good success with their Goodland Lime test in Smith County and think they can develop the GL further South. Just how far South is the question. No one can argue EOG must like something since they have essentially bought out the trend in most of Leon, Madison and Walker acquiring, Zaza, bluestone. some acreage from smaller independents and rumor is a recent deal with Burke. There is still a lot to be determined in the so called "Eaglebine" play but it should be entertaining to watch.
Good points. One thing to consider. When I spoke with the company several weeks back they indicated that the test wells are going below the Eaglebine all the way down to the Glen Rose. Each section is being individually flow tested as they work their way back up the well. If there is something there EOG is taking the methodical steps to find the good stuff and solidify the potential.
I see positive signs but I don't see us small guys knowing anything definitive for several months yet.