Chesapeake thinks it has 342 million barrels in Eagle Ford

The Oklahoma-based Chesapeake Energy Corp. has drilled 600 Eagle Ford wells so far. How good are they?

The company thinks it might ultimately recover an average of about 570,000 barrels of oil equivalent from each.

I’ll save you the calculator. That’s 342 million barrels of oil equivalent, a measure that includes both crude oil and natural gas liquids.

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The company gave the estimate in its third-quarter call with analysts last week. Here are some other Eagle Ford highlights:

Chesapeake expects to sign agreements this quarter to sell its northern block of Eagle Ford acreage, around Zavala County.

The company expects to produce an additional 1 million barrels of oil this year. Jeffery Fisher, executive vice president, said, “This is largely attributable to outstanding results in the Eagle Ford, where we are drilling longer laterals, achieving better than expected well performance, and benefiting from increased gathering system and processing capacity.”

It’s Eagle Ford wells are costing around $7 million (but is aiming ultimately for a well cost of $6.5 million – that’s for a well with a 6,300-foot horizontal reach).

In the first quarter, Chesapeake’s Eagle Ford production averaged 61,600 barrels per day, up 44,100 barrels, or 251 percent, from the year before.

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The company says by the end of the year it will produce around 71,000 barrels of liquids (crude oil and natural gas liquids like propane and butane) daily in the Eagle Ford.

By the second half of this year, about half of Chesapeake’s Eagle Ford wells will be drilled on multi-well pad sites. And in 2014, 75 percent will be drilled on multi-well pads. (That means fewer trucks on the roads for residents, and cheaper wells for the company).

And it has a big drilling program planned. “We conservatively estimate a drilling inventory of more than 3,500 high quality development locations, representing an inventory of more than 10 years based on current activity levels.”