Maximizing Production at Eagle Ford

Transcription

1 Maximizing Production at Eagle Ford Laredo Energy focuses on energy revolution and economic development at one of the most active shales in the world PRESIDENT AND CEO Laredo Energy Glenn Hart LOCATION Houston, Texas 58 STRATEGIZE SPRING 2015 Laredo Energy, a company that has drilled almost 500 wells in south Texas alone, continues to build its portfolio throughout the region in an effort to capitalize on the recent energy revolution that has come with new technologies and extraction methods. The company, founded in 2001 and based in Houston, deals with the acquisition, development and exploration of natural gas and oil. It has more than 200 years of combined experience, which sets Laredo Energy apart from other companies like it.

2 We have been operating in south Texas, and in Webb County in particular, since 1985, so our expertise in this gas region is, in our opinion, second to none, says Glenn Hart, President and CEO. SUCCESS AT EAGLE FORD The company is operating in the dry gas window of the Eagle Ford shale, and it also has an active drilling program in the part of the play known as North of the Arch. The southern area of Eagle Ford offers dry, high-volume gas, while there is oil in the northern portion and condensate-rich gas in the middle. Somewhat unlike the other companies drilling in Eagle Ford, Laredo Energy had additional initiatives in the works. In south Texas, we have successful horizontal wells in the Eagle Ford Shale plus six other horizons, and that s a big differentiator for us compared to others that operate in the shale, Hart says. We have all of those other productive horizons and they are all just as good, if not better, than Eagle Ford Shale. That is significantly different than most of the Eagle Ford Shale players in Texas. In all, the Eagle Ford Shale is likely to feature the largest economic development in the history of Texas. So far, there has been a more than $60 billion impact on the regional economy, creating roughly 116,000 jobs in almost 20 different counties. Over $30 billion has been spent developing what is one of the most active shales in the world. The Eagle Ford Shale lies beneath rich-gas intervals in formations like Wilcox, Escondido and Olmos. Adding to its appeal is its proximity to the largest gas market in the United States, with pipelines seemingly in every direction to its markets and a midstream infrastructure. Most of the producers in the Eagle Ford Shale are transitioning into development drilling as opposed to exploration and appraisal wells. This shift has increased the shale s total production from 130,000 barrels of oil in 2008 to just about 3 million barrels in Laredo Energy began exploring Eagle Ford in Covering roughly 130,000 acres of the plain, the company has drilled 27 horizontal wells in the Eagle Ford, but more than a hundred ARGUINDEGUI OIL CO. II, LTD. Arguindegui Oil is proud to be a partner of Laredo Energy, a great company. Started in 1942, Arguindegui Oil has been providing fueling solutions for over 70 years. Our company has been constantly increasing our service coverage across Texas. We proudly serve the different companies in the Eagle Ford Shale and in Texas that are the driving forces of the economy. Laredo, TX cesar@emperorservices.com We are proud to work with Laredo Energy and provide the following services: vacuum services, fresh water to rig, hauling off dirty water, hauling oil-based mud and water, oil-based cuttings, hauling hot shots, and testing BOP stacks. Fuel, Lubricant and Chemical Solutions. Serving Texas in: Laredo Edinburg Corpus Christi San Antonio Odessa Port Aransas Beeville CONTACT: csr@argpetro.com SPRING 2015 STRATEGIZE 59

3 in other formations. Its team expects to drill 25 to 30 additional wells by the end of A CHANGING INDUSTRY The oil industry has experienced some rapid changes over the past eight years, with the use of horizontal drilling and multi-stage fracs becoming commonplace. That was probably the most significant change in the industry over the course of my entire career, Hart says. Not one of us in our company had drilled a horizontal well in our careers, and now that is literally all we do. Prior to the standardized use of horizontal drilling, energy companies would traditionally drill vertical wells that went straight down and could access only a somewhat small target. Horizontal wells, on the other hand, are predicated on formations that are more widespread and referred to as blanket formations. They are more or less everywhere within a particular area, so you drill down to just above the top of the zone that you re interested in and then you turn the well horizontally and drill a horizontal lat- 60 STRATEGIZE SPRING 2015

4 eral, Hart says. In the early years of horizontal drilling, it was just a few hundred feet. Now the industry is up to 8,000 to 10,000 feet of lateral routinely. It has been quite a change. Being able to access exponentially more of the formation with horizontal drilling has transformed the energy industry. Hart says that with a horizontal well, a single drill site could provide as much as 20 times the ultimate production of a vertical well. Although drilling for oil continues to be a lucrative industry, Laredo Energy has halted its drilling in the northern Eagle Ford area due to recent declines in the prices of oil and natural gas. We will go back to the northern Eagle Ford area when prices improve, but that was our secondary area, Hart says. We started drilling in the northern area in the latter part of 2013 and we stopped drilling in January 2015 because of the prices. It looks like it is going to be a good area for us once the prices improve again, so it s only a matter of time. In addition to lower oil prices, Laredo Energy faces the challenge of a market that requires a large amount of capital to enter. The play is extremely capital intensive, Hart says. We have probably spent close to $1 billion on our projects since we drilled the first BORDER LEASE SERVICES, INC. Border Lease Services was established January 1, 2004 by Laredo native Mr. Ramiro Alarcon. It has become a family run business allowing for better customer care, work atmosphere, and general work ethic. Since then, we have been in the oilfield business offering several different services ranging from Production testing, Production Equipment, Lease crews, Building locations to Vacuum Services. We have the pleasure of working for many leading companies such as El Paso Energy, Chesapeake, Laredo Energy, Swift, Killam Oil Company and Lewis Energy. Our employees have been trained in H2S, PEC Core Compliance and the OSHA 30 Course. Border Lease Services employees work hand in hand to provide the best service possible. Here at Border Lease Services our number one goal is to lead the industry in safety, quality job performance, retention and training of personnel. Border Lease Services, Inc. strives to do the best job we possibly can do. We want to make the companies we work with feel at ease knowing they can trust in our work. It is our top priority to be the service company that our customers prefer. It is Border Lease Services Inc. s main mission to provide our customers with one hundred percent satisfaction Rotary Dr. Laredo TX Ph Fax SPRING 2015 STRATEGIZE 61

5 WINNE LAND & MINERALS, INC. Winne Land & Minerals, Inc. has had the opportunity and pleasure to perform petroleum land services for Mr. Glenn Hart since the late 1980 s when Mr. Hart owned Michael Petroleum. Mr. Hart has assembled a terrific aggressive exploration team at Laredo Energy that strives on honesty and integrity, thereby creating a working atmosphere that is second to none. We are honored to say we continue to provide oil and gas land services to Mr. Hart and Laredo Energy to assist them with continued success in their exploration endeavors. well [at Eagle Ford Shale], and we ve probably got several billion dollars more to spend before we can fully develop it. A RESPECTED ORGANIZATION Laredo Energy s management team has been working together since The company was created by Hart, who led Michael Petroleum for 19 years, and members of the senior management team at that company. Michael Petroleum was sold to Calpine Natural Gas in 2001, at which point Laredo Energy was created. Hart is extremely proud of the team behind the company and all it has been able to accomplish over the past 14 years. The people are exceptional, Hart says. This is a business of people and our management team has been working together for a long time. We probably have the two most experienced geologists in all of south Texas on our team. Throughout its relatively short history, the privately held Laredo Energy has sold its assets to larger, publically-held companies on three separate occasions. In 2003, a portion of Laredo s underdeveloped properties was sold to Chesapeake Energy Corporation for $200 million. WLMI has been committed to providing honest, accurate and reliable petroleum land services throughout the United States for the past 35 years. Highly experienced in all facets of the land business, including: Surface & Mineral Title Lease Acquisition Mineral & Royalty Acquisition Title Runsheets/Curative Surface Damage Negotiations/Settlement Pipeline Right-of-Way Acquisition Due Diligence (field & in-house) Then, in 2005, additional properties of Laredo Energy and its working interest partners were sold to Chesapeake Energy Corporation for $369 million. The land consisted of approximately 41,000 acres. Laredo Energy saw another opportunity to sell off some of its assets in 2007 when it sold approximately 27,000 acres of reserves to El Paso Corporation for $255 million. To date, the company s assets include upward of 140,000 acres of operated leases and an additional 31,000 acres of non-operated interests. Gilbert L. Winne, Jr., CPL President Lake Road, Bldg. 26 Houston, TX FAX CELL gwinne@winneland.com As Laredo Energy continues to grow its operations and its portfolio, Hart says the company plans to further explore its operations in east-central Texas for oil and in southern Texas for natural gas. 62 STRATEGIZE SPRING 2015