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Eagle Ford Shale's big operators getting output back to pre-Harvey levels

Houston (Platts)--15 Sep 2017 617 pm EDT/2217 GMT


Three weeks after Hurricane Harvey slammed into the lower Texas coast and caused widespread production shut-ins, although little actual damage, in the Eagle Ford Shale play, several big upstream operators say they are at or nearly at pre-storm levels.

Devon Energy said Friday its production is at pre-storm levels in the South Texas play. The Oklahoma City-based company produced 63,000 b/d of oil equivalent in the second quarter, including 36,000 b/d of crude oil and 96,000 Mcf/d of natural gas.

"Post-storm inspections indicated that Devon's producing assets and facilities sustained minimal damage," the company said in a statement. "The company has now resumed production from all producing pads in the Eagle Ford."

Devon estimated Harvey's total impact on its net liquids production in the Eagle Ford and selected other US areas to be a 15,000 b/d reduction in the third quarter, about two-thirds of it oil.

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The impact should be restricted to the third quarter and Devon said it represents 0.5% of its total expected volumes for full-year 2017.

Hurricane Harvey tore into the Texas Coast late August 25 near Corpus Christi as a Category 4 hurricane -- the second-most powerful on the five-level Saffir-Simpson wind scale. But it quickly downgraded to a tropical storm. Most producers have reported any damages to their wells or topside facilities was minimal or non-existent from the storm.

According to one reported estimate by IHS Markit, at one point a third of the Eagle Ford's 1.254 million b/d of August crude oil production and 4.835 Bcf/d of gas output -- figures projected by Platts Analytics -- was shut in. Platts now estimates September Eagle Ford production at 1.273 million b/d of oil and 4.896 Bcf/d of natural gas.

On Thursday, SM Energy said its Eagle Ford production had also returned to pre-storm levels. The company produced 88,000 b/d of oil equivalent in the Eagle Ford in the second quarter.

Harvey's total effect on its production is estimated at 200,000 boe or 2,174 boe/d, effectively reducing total previous Q3 guidance to 10.6-11 million boe (115,200-119,500 boe/d).

SM also said its Eagle Ford daily operations are run from its field office in Catarina, Texas, on the western end of the Eagle Ford further inland from the coast, and was not affected by the storm.

But SM's Houston office remains closed from flooding as Harvey's wide swath of heavy rains lumbered slowly northward from Corpus Christi, and eventually caused flooding over a large area of Beaumont in far East Texas and also western Louisiana.

In addition, BHP Billiton's Eagle Ford fields "have returned to near pre-storm levels of production and we sustained no damage from the storm," company spokeswoman Judy Dane told Platts in an e-mail.

BHP produced 99,000 boe/d in the Eagle Ford in the second quarter, including 47,000 b/d of crude oil and 166,000 Mcf/d of natural gas.

Ramp-up will continue as downstream refining and processing capacity becomes available, Dane said.

Also Thursday, EOG Resources reiterated its Eagle Ford impact from Harvey of 15,000 b/d of oil for the third quarter, although full-year production guidance is unchanged.

"It was a short-term impact," Billy Helms, EOG's executive vice president for exploration and production, said in webcast remarks at the UBS Bus-less Tour Conference in Houston. "We were affected by not only shut-in production, but we had a lot of road [obstructions] we had to deal with, and logistics, getting trucks moved, getting sand to location" for hydraulic fracturing of wells.

"[But] we're pleased with our recovery efforts and what it means to the full-year picture," Helms said.

--Starr Spencer, starr.spencer@spglobal.com
--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com




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