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Overview: Eagle Ford reserve estimate revision—ConocoPhillips

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ConocoPhillips

ConocoPhillips (COP) is an independent oil and gas company that has major operations in the Eagle Ford Shale.

The Eagle Ford, where ConocoPhillips has an acreage of 220,000 acres, is one of the major growth drivers for COP. In a recent analyst presentation, the company revised the estimates of its Eagle Ford reserves from 1.8 million barrels of oil to 2.5 million barrels of oil—an ~36% increase.

ConocoPhillips explained that the higher estimate is due to a reassessment of the quality and improvisation of its technical know-how.

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Having identified more than 3,000 drilling locations across the Eagle Ford, Conoco plans to spend $3 billion—which is ~18% of the company’s total projected capital spending budget of $16.7 billion—in the play from 2014 to 2017. This increased spending is expected to boost its production from the play to more than 250,000 barrels of oil equivalent per day by 2017. The company plans to spend $3 billion as capex into the Eagle Ford every year through 2017.

Given the massive deployment of its Eagle Ford assets, COP stands to benefit from the lifting of the export ban. In fact, it has been one of the major producers to get the U.S. government to allow crude exports. In a recent conference, COP urged the importance of exporting crude. COP emphasized that the U.S. increased its production of oil from unconventional plays, but refinery and pipeline limitations have curbed the full benefits of the shale oil revolution. COP urged that, “The world needs the crude and there are places where we could export that crude into existing refineries.”

Lifting the export ban could bode well for the future of oil producers.

COP is a part of several ETFs including the Energy Select Sector SPDR Fund (XLE), the iShares U.S. Energy ETF (IYE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the Vanguard Energy ETF (VDE).

Continue reading the next section in this series to learn about other producers who have rallied for crude exports.

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