Well Lateral Length | Quarterly / Earnings Reports | Second Quarter (2Q) Update | Capital Markets | Drilling Program - Wells | Drilling Activity | Capex Increase | Completions Increase

EP Amps Up Completions for 2H18, Ups Capex; Plans Longer Eagle Ford Laterals

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   |    Thursday,August 30,2018

EP Energy reported its Q2 2018 results.

This is the first quarter since the company announced it had adopted a new management team as well as a new strategy.

Ups Completion Plans for 2H18

The company has updated its 2018 plans including ramping up completions and increasing its capex.

• Capex increased by +4% at the midpoint to $630-670 million

• Completions up to 139 gross (up from 130)

The company also noted it would be drilling 16% longer laterals in the Eagle Ford compared to 1H18. This follows the company's announcement it would be refocusing on the play back in May 2018.

Eagle Ford: Drills Longest Laterals to Date at 16,000'

In July, the company drilled two 16,000 foot lateral wells, which are the longest laterals in company history. This is an important step forward in the Eagle Ford asset as the company looks to develop remaining acreage in the most capitally efficient manner going forward. The company believes 15,000 foot laterals will be the future of development for a large portion of the remaining acreage. The step change from 7,500 foot laterals creates a significant savings in total infrastructure costs.

The company expects the average lateral length for the second half of 2018 to be 16% greater than the first half of 2018. In the second half of 2018, the company plans to reallocate capital from the Permian to the Eagle Ford to take advantage of the improved returns and capital efficiency driven by the favorable LLS and Brent pricing.

EP Energy averaged three drilling rigs, invested $122 million and completed (frac'd) 17 gross and net wells in the second quarter of 2018 in its Eagle Ford program.

Altamont Uinta: Accelerates Recompletion Program

EP Energy operated two joint venture drilling rigs and completed (frac'd) seven gross wells and two net wells in the second quarter of 2018. Total capital invested in the Altamont program in the second quarter of 2018 was $33 million. The company also accelerated its high-return recompletion program, successfully recompleting 29 wells during the quarter, which broke the company's all-time record from the first quarter of 2018.

The company spud and rig released its first two horizontal wells during the quarter. The two horizontal wells have an average lateral length of 9,000 feet. The company has commenced completion operations and expects to initialize flowback on both wells over the next 30-60 days. In addition, the company expects to drill two incremental horizontal wells in the third quarter to accelerate the delineation of the horizontal potential of the field.

Production:

- Q2 production of 82.5 MBOEPD (up +3% from 1Q18 and down -3% YOY)