The Eagleford Shale and More! - Laredo Energy
The Eagleford Shale and More! (You mean there’s more? ) September 2014
Company Overview •
Michael Petroleum Corporation • Formed in 1983 • Active in Brazos County (1983-1985) and South Texas (1983-2001)
Primary Focus
•
Acquisition & development of natural gas and oil reserves in South Texas and East Texas
South Texas Presence Since 1983
•
Group has drilled more than 500 wells in Webb and Zapata Counties
•
Acquired over 500 wells in LaSalle, McMullen, Webb, and Zapata Counties
•
Michael Petroleum – sold to Calpine in 2001 for $371 million
•
Laredo Energy I – sold to Chesapeake Energy in 2003 for $110 million (181% IRR)
•
Laredo Energy II – sold to Chesapeake Energy in 2005 for $227.5 million (411% IRR)
•
Laredo Energy III - sold to El Paso Corporation in 2007 for $205 million (201% IRR)
•
Acreage Position: 126,000 acres – 93,000 in S. Texas, 33,000 in Eaglebine
•
Equity support from Avista Capital Partners and Old Ironsides Energy
•
Significant divestiture in March 2014, Expansion into Brazos, Burleson & Robertson Counties
Predecessor
Growth & Sale of 4 Companies
Laredo Energy Today
2
Timeline of Major Events 1983 Michael Petroleum forms
2001 Laredo Energy I Key personnel from MP. Equity backing: EnCap Investments
2003 Laredo Energy II EnCap equity-backed
2007 Laredo Energy IV EnCap, Avista backed Begins leasing in unconventional plays
2005 Laredo Energy III EnCap equity-backed 2001: Michael Petroleum SOLD to Calpine (later Rosetta) 400 drilling sites, 22 MMcf/d net production
3
2003 Laredo I SOLD to CHK 134 drilling sites, 13 MMcf/d net production
2005 Laredo II SOLD to CHK 174 drilling sites, 20 MMcf/d net production
2007 Laredo III SOLD to El Paso 231 drilling sites, 23 MMcf/d net production
LAREDO ENERGY TODAY 3 rigs running in 2 Theaters of Operation (Webb/Brazos) 41 MMcf/d, 1240 Bbl/d gross production 15+ Tcf gross resource potential
2013 Laredo V Avista, O.I.E. backed drills first Eagle Ford well in Brazos Co.
2009 Laredo IV drills first S TX 2014 Eagle Ford well Laredo VI Avista backed continues mature asset development in S TX
Executive Summary Company Gross Acres 126,000
Proved Reserves – 360 Bcfe Probable Reserves - 342 Bcfe
Current Gross Production 41 MMcf/d, 1,240 BOPD
• 38 Operated Producing Wells • 31 in Webb County (7 Eagle Ford, 17 Escondido, 7 Olmos) • 7 in Brazos, Burleson, Robertson Counties ( 4 Eagle Ford, 1 Austin Chalk, 1Buda) • South Texas Webb County – 93,000 Gross Acres • Currently Operating 1 Rig, 2nd Operated Rig 4th Qtr 2014 • Southeast Texas Brazos, Burleson & Robertson Counties – 33,000 Gross Acres • December, 2013 first horizontal Eagle Ford well • Currently Operating 1 Rig, 2 Non-Operated Rigs Running • Divestment in March, 2014 • Gross Production Rate Built to 110 MMcfd for all properties • 82.5% of 22,000 Acre Position in Webb County, Retained Non-Operated Working Interest • Additional 12,000 Acres in Webb County • 3P Reserves of 1.7 Tcfe as of June 30, 2014 (D&M Independent Reserve Appraisal)
4
Business Strategy • Laredo Energy’s battle-tested strategy for value creation Build to Sell
Create Value Through • • •
Relationships •
5
Strong relationships with
Relationships Technical Expertise Drill Bit
Technical Expertise •
Focused Operations
‒
Landowners
‒ South Texas Natural Gas
‒
Community
‒ “Eaglebine” Oil
‒
Vendors
•
Selective pursuit of reserve acquisitions with additional drilling opportunities
Drill Bit •
Control Development Through Operatorship
‒
Operate 90% net acreage
‒
Timing, Development Plan & Capital
Laredo Energy in South Texas Duval
La Salle
McMullen
Dimmit
Webb
• MPC & LE Partnerships
• From all Laredo entities since 2001, on prospects generated by Laredo Group • 500 locations drilled • 600+ Bcf produced • 160 MMcf/d peak gross production
Laredo Group Experience: 500,000+ Acres
• Laredo Energy Zapata Jim Hogg
• First LE horizontal well drilled in 2009 • 101 horizontal wells drilled to date
• 110 MMcf/d peak gross production before March divestiture
Legend LE 1 LE 2 LE 3 LE 4 MPC
6
0
5
10
20 Miles
Starr
Laredo Energy in the Eagle Ford – Webb County La Salle
McMullen
Dimmit
Duval
R.V. Benavides 2 (Eagle Ford Logs & Cores)
Hawkville Discovery
Webb
Zapata
Lobo Trend Area
Jim Hogg
Legend LE 1 LE 2 LE 3 LE 4 MPC
7
0
5
10
20 Miles
Starr
Hill Ranch 1H (Escondido)
Northern Webb County: Wells in Multiple Horizons
Wilcox (1V)
Escondido (1V, 48H)
Olmos (13H) San Miguel (1H) Eagle Ford (1V,26H*)
* 4 have Austin Chalk producing in curve of EF Lateral 8
Austin Chalk (2H)
Austin Chalk/Eagleford Completions and Penetrations
9
Webb County: GB Minerals AC/EF Performance
10
Webb County: Reservoir Performance Analysis
11
Hill Ranch #4H AUSTIN CHALK & EAGLE FORD "COMMINGLED" Interval 11,710' - 17,344' - 13 Stages: Slick Water Frac
Austin Chalk
AUSTIN CHALK
EF Stage 11
UPPER EAGLE FORD LOWER EAGLE FORD BUDA
12
Stage 10
Stage 9
Stage 8
Stage 7
Stage 6
Stage 5
Stage 4
Stage 3
Stage 2
Stage 1
Evolution of Development – Large Section of AC & EF Fasken Area Webb Co. – EF
RVB Area Webb Co. – EF
Austin Chalk
Austin Chalk
Original completions in Base of Upper EF Up EF
Up EF
Current strategy is in LOWER EF Lwr EF
Lwr EF
13
Escondido Completions and Penetrations
14
Olmos Completions and Penetrations
15
Eaglebine
16
Michael Petroleum Wells
Luther Unit #1 Buda/Georgetown: 47,488 Bbls Austin Chalk: 19,464 Bbls
Gulf - Payne Unit #1 Woodbine: 34,691 Bbls
Luther A #1 Buda/Georgetown: 62,869 Bbls Austin Chalk: 70,159 Bbls
RF Franze #1 Buda/Georgetown: 36,981 Bbls
Luza Unit #1 Buda/Georgetown: 48,337 Bbls Austin Chalk: 33,592 Bbls Smith Unit #1 Buda/Georgetown: 12,722 Bbls Austin Chalk: 19,356 Bbls
Luza Dairy Unit #1 Buda/Georgetown: 2,068 Bbls Austin Chalk: 32,596 Bbls 17
Ennis Owens #1 Buda/Georgetown: 2,793 Bbls
RF Franze #2 Buda/Georgetown: 29,994 Bbls
Type Log – Brazos Area Acreage – Shallow Zones LE - Galls 1H
Escondido/Navarro
Olmos
Pecan Gap 18
Type Log – Brazos Area Acreage – Deep Zones LE – Scasta 1H
19
Brazos County Area: Wells in Multiple Horizons
Pecan Gap (Potential) Taylor (Potential )
Austin Chalk (2H)
Woodbine (1*,1H) Eagleford (3H)
Buda/ GT (1H)
20
* Woodbine Behind Pipe in Curve of EF Lateral
PAPA JOE SCASTA UNIT #1H WOODBINE A&D/EAGLE FORD "COMMINGLED" Interval 7,445' - 13,240' 22 Stages (Eagle Ford) - 2 Stages (Woodbine): Slick Water Frac
Austin Chalk
Woodbine A
Stage 24
Woodbine D
Stage 23
Eagle Ford
Buda 21
“Brazos” Area Acreage – Spread over 4 Counties
22
Eagle Ford Development McGee Lease
Scasta #1H
Anadarko Scasta-Milberger Unit 1EB-2EB
495 MBO EUR 610 MBO EUR
530 MBO EUR
625 MBO EUR
560 MBO EUR 510 MBO EUR
495 MBO EUR
Hamilton #1H 395 MBO EUR 450 MBO EUR
Stasny-Honza #1H 700MBO EUR
Halcon Unit Area ~600 MBO EUR 23
Hunting for the Right Formula – Webb vs Brazos
• Webb County • Natural Gas Window – 0.1 to 2.8 GPM • Minimal Urban Development • Large Ranches • Water Procurement/ Planning • Larger Window for Lateral Placement in EF 24
• Commingle Austin Chalk
• • • • • • •
Brazos County Oil Window – Oil plus 8 to 10 GPM gas Significant Urban Development Smaller acreage tracts – More JV Development Other environmental issues – Toads? Much smaller Window for Lateral Placement in EF Commingle Woodbine
Company Overview •
Michael Petroleum Corporation • Formed in 1983 • Active in Brazos County (1983-1985) and South Texas (1983-2001)
Primary Focus
•
Acquisition & development of natural gas and oil reserves in South Texas and East Texas
South Texas Presence Since 1983
•
Group has drilled more than 500 wells in Webb and Zapata Counties
•
Acquired over 500 wells in LaSalle, McMullen, Webb, and Zapata Counties
•
Michael Petroleum – sold to Calpine in 2001 for $371 million
•
Laredo Energy I – sold to Chesapeake Energy in 2003 for $110 million (181% IRR)
•
Laredo Energy II – sold to Chesapeake Energy in 2005 for $227.5 million (411% IRR)
•
Laredo Energy III - sold to El Paso Corporation in 2007 for $205 million (201% IRR)
•
Acreage Position: 126,000 acres – 93,000 in S. Texas, 33,000 in Eaglebine
•
Equity support from Avista Capital Partners and Old Ironsides Energy
•
Significant divestiture in March 2014, Expansion into Brazos, Burleson & Robertson Counties
Predecessor
Growth & Sale of 4 Companies
Laredo Energy Today
2
Timeline of Major Events 1983 Michael Petroleum forms
2001 Laredo Energy I Key personnel from MP. Equity backing: EnCap Investments
2003 Laredo Energy II EnCap equity-backed
2007 Laredo Energy IV EnCap, Avista backed Begins leasing in unconventional plays
2005 Laredo Energy III EnCap equity-backed 2001: Michael Petroleum SOLD to Calpine (later Rosetta) 400 drilling sites, 22 MMcf/d net production
3
2003 Laredo I SOLD to CHK 134 drilling sites, 13 MMcf/d net production
2005 Laredo II SOLD to CHK 174 drilling sites, 20 MMcf/d net production
2007 Laredo III SOLD to El Paso 231 drilling sites, 23 MMcf/d net production
LAREDO ENERGY TODAY 3 rigs running in 2 Theaters of Operation (Webb/Brazos) 41 MMcf/d, 1240 Bbl/d gross production 15+ Tcf gross resource potential
2013 Laredo V Avista, O.I.E. backed drills first Eagle Ford well in Brazos Co.
2009 Laredo IV drills first S TX 2014 Eagle Ford well Laredo VI Avista backed continues mature asset development in S TX
Executive Summary Company Gross Acres 126,000
Proved Reserves – 360 Bcfe Probable Reserves - 342 Bcfe
Current Gross Production 41 MMcf/d, 1,240 BOPD
• 38 Operated Producing Wells • 31 in Webb County (7 Eagle Ford, 17 Escondido, 7 Olmos) • 7 in Brazos, Burleson, Robertson Counties ( 4 Eagle Ford, 1 Austin Chalk, 1Buda) • South Texas Webb County – 93,000 Gross Acres • Currently Operating 1 Rig, 2nd Operated Rig 4th Qtr 2014 • Southeast Texas Brazos, Burleson & Robertson Counties – 33,000 Gross Acres • December, 2013 first horizontal Eagle Ford well • Currently Operating 1 Rig, 2 Non-Operated Rigs Running • Divestment in March, 2014 • Gross Production Rate Built to 110 MMcfd for all properties • 82.5% of 22,000 Acre Position in Webb County, Retained Non-Operated Working Interest • Additional 12,000 Acres in Webb County • 3P Reserves of 1.7 Tcfe as of June 30, 2014 (D&M Independent Reserve Appraisal)
4
Business Strategy • Laredo Energy’s battle-tested strategy for value creation Build to Sell
Create Value Through • • •
Relationships •
5
Strong relationships with
Relationships Technical Expertise Drill Bit
Technical Expertise •
Focused Operations
‒
Landowners
‒ South Texas Natural Gas
‒
Community
‒ “Eaglebine” Oil
‒
Vendors
•
Selective pursuit of reserve acquisitions with additional drilling opportunities
Drill Bit •
Control Development Through Operatorship
‒
Operate 90% net acreage
‒
Timing, Development Plan & Capital
Laredo Energy in South Texas Duval
La Salle
McMullen
Dimmit
Webb
• MPC & LE Partnerships
• From all Laredo entities since 2001, on prospects generated by Laredo Group • 500 locations drilled • 600+ Bcf produced • 160 MMcf/d peak gross production
Laredo Group Experience: 500,000+ Acres
• Laredo Energy Zapata Jim Hogg
• First LE horizontal well drilled in 2009 • 101 horizontal wells drilled to date
• 110 MMcf/d peak gross production before March divestiture
Legend LE 1 LE 2 LE 3 LE 4 MPC
6
0
5
10
20 Miles
Starr
Laredo Energy in the Eagle Ford – Webb County La Salle
McMullen
Dimmit
Duval
R.V. Benavides 2 (Eagle Ford Logs & Cores)
Hawkville Discovery
Webb
Zapata
Lobo Trend Area
Jim Hogg
Legend LE 1 LE 2 LE 3 LE 4 MPC
7
0
5
10
20 Miles
Starr
Hill Ranch 1H (Escondido)
Northern Webb County: Wells in Multiple Horizons
Wilcox (1V)
Escondido (1V, 48H)
Olmos (13H) San Miguel (1H) Eagle Ford (1V,26H*)
* 4 have Austin Chalk producing in curve of EF Lateral 8
Austin Chalk (2H)
Austin Chalk/Eagleford Completions and Penetrations
9
Webb County: GB Minerals AC/EF Performance
10
Webb County: Reservoir Performance Analysis
11
Hill Ranch #4H AUSTIN CHALK & EAGLE FORD "COMMINGLED" Interval 11,710' - 17,344' - 13 Stages: Slick Water Frac
Austin Chalk
AUSTIN CHALK
EF Stage 11
UPPER EAGLE FORD LOWER EAGLE FORD BUDA
12
Stage 10
Stage 9
Stage 8
Stage 7
Stage 6
Stage 5
Stage 4
Stage 3
Stage 2
Stage 1
Evolution of Development – Large Section of AC & EF Fasken Area Webb Co. – EF
RVB Area Webb Co. – EF
Austin Chalk
Austin Chalk
Original completions in Base of Upper EF Up EF
Up EF
Current strategy is in LOWER EF Lwr EF
Lwr EF
13
Escondido Completions and Penetrations
14
Olmos Completions and Penetrations
15
Eaglebine
16
Michael Petroleum Wells
Luther Unit #1 Buda/Georgetown: 47,488 Bbls Austin Chalk: 19,464 Bbls
Gulf - Payne Unit #1 Woodbine: 34,691 Bbls
Luther A #1 Buda/Georgetown: 62,869 Bbls Austin Chalk: 70,159 Bbls
RF Franze #1 Buda/Georgetown: 36,981 Bbls
Luza Unit #1 Buda/Georgetown: 48,337 Bbls Austin Chalk: 33,592 Bbls Smith Unit #1 Buda/Georgetown: 12,722 Bbls Austin Chalk: 19,356 Bbls
Luza Dairy Unit #1 Buda/Georgetown: 2,068 Bbls Austin Chalk: 32,596 Bbls 17
Ennis Owens #1 Buda/Georgetown: 2,793 Bbls
RF Franze #2 Buda/Georgetown: 29,994 Bbls
Type Log – Brazos Area Acreage – Shallow Zones LE - Galls 1H
Escondido/Navarro
Olmos
Pecan Gap 18
Type Log – Brazos Area Acreage – Deep Zones LE – Scasta 1H
19
Brazos County Area: Wells in Multiple Horizons
Pecan Gap (Potential) Taylor (Potential )
Austin Chalk (2H)
Woodbine (1*,1H) Eagleford (3H)
Buda/ GT (1H)
20
* Woodbine Behind Pipe in Curve of EF Lateral
PAPA JOE SCASTA UNIT #1H WOODBINE A&D/EAGLE FORD "COMMINGLED" Interval 7,445' - 13,240' 22 Stages (Eagle Ford) - 2 Stages (Woodbine): Slick Water Frac
Austin Chalk
Woodbine A
Stage 24
Woodbine D
Stage 23
Eagle Ford
Buda 21
“Brazos” Area Acreage – Spread over 4 Counties
22
Eagle Ford Development McGee Lease
Scasta #1H
Anadarko Scasta-Milberger Unit 1EB-2EB
495 MBO EUR 610 MBO EUR
530 MBO EUR
625 MBO EUR
560 MBO EUR 510 MBO EUR
495 MBO EUR
Hamilton #1H 395 MBO EUR 450 MBO EUR
Stasny-Honza #1H 700MBO EUR
Halcon Unit Area ~600 MBO EUR 23
Hunting for the Right Formula – Webb vs Brazos
• Webb County • Natural Gas Window – 0.1 to 2.8 GPM • Minimal Urban Development • Large Ranches • Water Procurement/ Planning • Larger Window for Lateral Placement in EF 24
• Commingle Austin Chalk
• • • • • • •
Brazos County Oil Window – Oil plus 8 to 10 GPM gas Significant Urban Development Smaller acreage tracts – More JV Development Other environmental issues – Toads? Much smaller Window for Lateral Placement in EF Commingle Woodbine
