Cabot talks Eagle Ford and the emerging Pearsall Shale

The Houston-based Cabot Oil & Gas has a lot of Eagle Ford Shale acreage, but is also one of the few companies talking publicly about its work in the underlying Pearsall Shale.

Here’s some Pearsall and Eagle Ford highlights from Cabot’s recent first-quarter call with analysts.

Cabot plans 15 horizontal wells in the Pearsall this year, and right now it’s drilling three well. So far it has nine producing Pearsall wells, which have a 30-day production rate average of 600 barrels of oil equivalent per day (that’s the mix of crude oil and natural gas and natural gas liquids produced in a well). About half of those barrels are crude oil.

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The company has been concentrating on the Pearsall Shale, but in doing so it is “holding” it’s Eagle Ford acreage. (Mineral leases often have a time by which drilling has to start – often three years – and a depth severance provision, so drilling a deep formation like the Pearsall “holds” all the formations above it such as the Eagle Ford, so companies can come back and drill them later).

Dan O. Dinges, chairman, CEO and President of Cabot, said, “We had 3 rigs operating in the Pearsall, 1 rig has moved back to the Eagle Ford during the quarter… The Pearsall, it’s still a young play and remains a science project for us… We have a thick column of hydrocarbon and continue to work on all aspects of drilling and completing a cost-effective well.”

But even though it’s concentrating on Pearsall right now, it has 43 wells in the Eagle Ford. In the first quarter the company drilled its longest horizontal reach to day, at 8,200 feet. The well was complete with a 30-stage hydraulic fracturing operation, which uses water, sand and chemicals to break open the dense shale rock.

You can read a full transcript here on Seeking Alpha. (Registration is free).

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