Replies to This Discussion

Permalink Reply by Mark on March 15, 2022 at 11:04pm

Interesting set of numbers and data - thanks for pulling this together.

My take on this uptick in activity is:

Many of the original operators that "founded" the EF have moved on via selling their assets to third parties who paid big money for the undrilled EF locations. Combine that with the fact that the original Gen 1 EF wells are now reaching the end of their productive lives, these new operators are starting to cash in on their investments. This uptick started several months ago - it may only grow more with the recent (and predictably short lived) triple digit oil price.

These new operators drilling new wells are benefiting from the latest in frac approaches. A good example is Ensign (who purchased Pioneer's EF assets). Ensign is mostly ex Murphy people - they know the EF trend. Latest frac approach has allowed them to make much better EF wells than the original Pioneer wells in the same area. e.g. production on this new laterals in the first 8-9 months is more that the original Pioneer wells made in 3-5 years. Fast payout and cash flow = better economics.

You are also getting some operators in the EF trend who are "old" EF players. Validus is headed by ex CHK people who worked the EF in S Tx in the early days of the play. Recoil is headed by ex Petrohawk people. Old players taking new technology to exploit the EF.

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Permalink Reply by Aggie '75 on March 16, 2022 at 10:42am

My info shows 14 rigs working in Karnes County, and another 4 to 6 close by in Atascosa, Wilson, Gonzales Counties. You think these are all Gen 2  EF folks?

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Permalink Reply by Mark on March 16, 2022 at 11:33am

EOG is still active but using Gen 5 frac approach. I would estimate over 75% of rigs are Gen 2 or 3 companies. Highly economic area for EOG

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Permalink Reply by Ed on March 22, 2022 at 11:31pm

So it may be a blessing to those of us whom EOG has HBP but has not yet done infill. Any time now will be okay too.

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Permalink Reply by Aggie '75 on March 23, 2022 at 10:30am

Morning Ed,

Have you seen any EOG drilling in your area?.

They completed "fill in" on my relatives property north of Pawelkville a little over a year ago, but haven't done any fill-in yet on their units southwest of Falls City along Wilson - Karnes Line. Granted those HBP wells on those later units in the south have had only about  75% of the per well production those units in the north,

Aggie '75

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Permalink Reply by Ed on March 23, 2022 at 10:54am

Hi Aggie '75.

Yes, EOG is drilling on leases very close. Hopefully they can hit the bull's eye soon on ours. I am glad that improvements have been made since Gen 1 and feel blessed to have weathered through the tough times with only HBP.

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Permalink Reply by James C. Maxwell on March 16, 2022 at 6:31pm

Hey, Mark,

I am unschooled in the various Gen's of fracking that you cite.

Possible for you to list 3-4 characteristics that distinguish Gen 5 from Gen 2, please?  Would be most appreciated.  Thanks.

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Permalink Reply by Mark on March 21, 2022 at 11:46am

Tried to reply to this last week on phone - that didn't work!

Without diving deep into years of frac approaches, it is impossible to point to "specific" characteristics that separate Gen 1-2 fracs from most recent Gen 5+ frac designs.

• Aside from longer laterals, improved lateral placement in optimum landing zones and improved casing cementing techniques (all of which are very important as to well results), more modern fracs can be categorized by some of the following characteristics:
• Shorter frac stages (as short as 100-150' vs older 300+' stages)
• Perf cluster spacing differences
• Proppant types, mixes and concentrations (e.g. 100 mesh tail in proppant as well as using 3-4 different sizes of proppant)
• Proppant volumes (up to and over 3000# per foot proppant loading)
• Fluid volumes (much higher volumes per foot of zone frac'd)
• Use of diverters
• Specific frac'ing based on section penetrated (using logs and data from laterals to select zones to frac / plus avoid other zones that are not worth frac'ing)

Seeing this info is difficult since everything is now filed in Frac Focus - one needs to have a graduate degree in frac'ing to understand all the additives. Plus generate an algorithm to covert the percentages of different items to pounds and gallons of each item.

Clear as mud - but the proof is in the results: better IP's and larger EUR's

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Permalink Reply by James C. Maxwell on March 21, 2022 at 1:00pm

Wow!  Thanks.  Great info.

It is truly amazing the sophistication of such a gross "macro" undertaking as fracking, a couple of miles deep in the ground, invisible.  Not to mention the precision of steering of the drill bit. 

But, you're right:  The proof of the pudding is the production volumes and rates.

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Permalink Reply by James C. Maxwell on March 25, 2022 at 1:59pm

Anyone know anything about Pillar EFS, LLC?  A Dallas-based E&P company backed by some energy private equity.  I am unfamiliar with the professional backgrounds of the officers of Pillar.

Pillar has just permitted 2 wells in Atascosa, pretty far up-dip.  The pad site is about 5.5 mi SW of the Wilson-Atascosa county line, and, if you drew the extension of the Wilson-Karnes line SW into Atascosa County, it is about 5 miles NW of that line.

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Permalink Reply by Mark on March 25, 2022 at 2:27pm

I know this management team very well. Ex Brigham and then Cinco O&G / EnCap backed.

Also know the Old Ironsides PE group that is presently backing them.

Their management team is as good as it gets and understand the unconventional approach with the best of them.

I believe that they were in this same area while working as Cinco O&G.

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Permalink Reply by Mark on March 25, 2022 at 2:49pm

Looked at this Pillar permit area - interesting

EF section around 8500-8700'. Only about 70' thick with about 50' of the sweet spot EF section. But also underlies a lower AC section that may be very interesting.

This is area where EOG was drilling their "wildlife" wells in 2013-2014 - Ocelot, Grouse, etc. 

Short laterals (5000') - limited as to how far to go north due to faulting. Decent fracs for that time frame (around 1300-1500# per foot proppant loads).

Wells were notorious for lower IP rates (300 BOPD range). GOR decent with a bit lower oil gravity (low 30's).

My prediction - Pillar EFS is looking to frac bigger and improve stimulated rock volumes in the EF section as well as mechanically co-mingling upward into the lower AC section. Expect to see 2500+ pounds per foot proppant loading.

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