Reagan County, TX - Wolfcamp Shale

By Tim - http://oilshalegas.com

EOG Resources (EOG) is currently drilling for oil in the Permian Basin, Midland Basin, and the Wolfcamp Shale.

In the West Texas Permian Basin, EOG increased drilling activity in the Wolfcamp formation during the second half of 2011 in preparation for a more active year in 2012. EOG reported success from the upper Wolfcamp zone.

The University 9 #2803H in Reagan County, 25 miles west of its current middle Wolfcamp activity began production at 883 Bopd with 68 Bpd of NGLs and 388 Mcfd of natural gas. EOG has a 100 percent working interest in the well."

In Irion County, the University 43 #0902H and 40A #0402H were completed in the middle Wolfcamp zone at initial oil rates of 1,088 and 1,076 Bopd, respectively. In addition to the strong oil production, the wells were turned to sales with 86 and 129 Bpd of NGLs and 489 and 736 Mcfd of natural gas, respectively. EOG has 90 and 85 percent working interest in the wells, respectively. On the border between Irion and Crockett counties, the University 40 #1309H and 38 #0601H began production at 1,738 and 1,077 Bopd with 137 and 119 Bpd of NGLs and 779 and 678 Mcfd of natural gas, respectively. EOG has 88 percent working interest in these wells. EOG plans to operate a four-rig drilling program in the Wolfcamp during 2012.

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Permian Basin - Callon Petroleum (CPE) - Wolfcamp Formation

By Tim - http://oilshalegas.com

Callon Petroleum (CPE) is currently drilling for oil in the Permian Basin, Midland Basin, and the Wolfcamp Shale located in Texas. Callon Petroleum (CPE) provides details on this exploration below.

Net production from Callon's Permian properties increased 135% to 965 barrels of oil equivalent per day (Boe/d) in 2011 from 411 Boe/d in 2010. The company drilled 36 gross (33 net) vertical Wolfberry wells in 2011 and net production from the properties at year-end 2011 was approximately 1,300 Boe/d.

At the Pecan Acres Field, the two initial wells have been drilled and stimulated, and are currently flowing back in preparation for first production. In addition, a third well has been drilled, but not yet completed, and a fourth well is currently being drilled. Callon plans to complete the third and fourth wells in March 2012.

Based upon Callon's ongoing evaluation of its acreage position in the East Bloxom Field, located in Upton County, TX, and recent industry drilling results in northern Upton County and western Reagan County, TX, the company plans to commence a horizontal drilling program at its East Bloxom Field targeting the Wolfcamp B shale during the second quarter of 2012. Callon recently contracted a new-generation drilling rig under a two-year contract to execute the East Bloxom program.

Additionally, Callon has recently expanded its Permian Basin acreage position by 150% to 24,009 net acres from 9,539 net acres at December 31, 2011 with the acquisition of 16,020 gross (14,470 net) acres. The new leasehold is located in the northern portion of the Midland Basin which has had limited drilling activity relative to recent drilling and evaluation efforts in the southern portion of the basin. Callon has an average 90% working interest across the contiguous acreage positions and is the operator. The lease bonus payments were funded from existing cash balances. The company expects to acquire 3-D seismic data in the first half of 2012 and commence drilling to delineate the acreage in the third quarter of 2012. Callon has performed technical analysis of the newly acquired acreage and believes that the acreage is prospective for horizontal drilling of the Cline shale and vertical drilling of multiple intervals. Callon is continuing to pursue additional leasing opportunities in the area.

Callon produced 1.8 MMboe for the year 2011, comprised of 54% crude oil and 46% natural gas and natural gas liquids. The company's production and reserve growth initiatives continue to focus primarily on the Permian Basin, building a multi-year portfolio of oil-weighted drilling locations. In order to advance its growth plans, Callon will be directing a significant amount of its capital budget in 2012 to horizontal drilling and new acreage initiatives in the Permian Basin. The company believes the potential for increased production rates and improved capital efficiency from its horizontal drilling initiatives will enhance the quality of Callon's asset base as this program evolves over time.

Given the near-term production impact of a transition to horizontal drilling in 2012, including reduced vertical activity and the timing of initial production from horizontal completions, and scheduled downtime at the Medusa and Habanero Fields, the company estimates that full-year production for 2012 will approximate 1.7 – 1.9 MMboe. Importantly, Callon anticipates that Permian production will grow approximately 100% in 2012, reflecting the growing contribution of this basin to the company's total production.

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Reagan County, Texas: Permian Basin Shale Update

By Andrea: http://oilshalegas.com

El Paso Corp. (EP) recently won a 123,100 acre lease in the Wolfcamp which is part of the Permian Basin shale. The land covers Reagan County, Crockett County, Upton County and Irion County, all located in Texas:

El Paso Corporation (EP) announced that it was the winning bidder for leases covering approximately 123,100 acres in Reagan, Crockett, Upton and Irion counties in the September 22, 2010 University of Texas lease sale. The acquired leases target the Wolfcamp shale and add to approximately 12,000 net acres of existing leasehold in this play. El Paso now has a material position in a new oil shale program with significant resource and production potential.

"We are very excited to announce our entry into a promising new oil shale. Our acreage acquisition is the culmination of an extensive regional study by our technical team, and we expect it to become a new oil-focused core area," said Brent Smolik, president of El Paso Exploration & Production Company. "Today's announcement represents our second organic shale entry following our successful acquisition of more than 170,000 net acres in the Eagle Ford shale. The leasehold we have acquired has multiple pay opportunities and the combination of large contiguous blocks and a single royalty owner give us tremendous operational flexibility. We intend to leverage the successes we have had in our Haynesville and Eagle Ford shale programs, and we will update the market on our plans for the Wolfcamp shale during our third quarter earnings conference call on November 3, 2010."

El Paso remains committed to managing its E&P program for returns and having E&P live within its means. In addition, the company remains committed to generating free cash flow in 2012. To that end, the $180 million cost of the acquired acreage will be funded over time through portfolio rationalization, and future development capital will compete with other programs in the portfolio.

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