Eagle Ford Shale Play http://eaglefordshale.com News, MarketPlace, Jobs Mon, 27 Apr 2015 19:12:26 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.1 Weathering the Oil Crisis http://eaglefordshale.com/news/weathering-the-oil-crisis/ http://eaglefordshale.com/news/weathering-the-oil-crisis/#respond Mon, 27 Apr 2015 14:11:59 +0000 http://eaglefordshale.com/?p=7781 Thunder Exploration, Inc

Thunder Exploration, Inc

Daily news reports continue to announce cuts, layoffs and mergers from big producers, but it is the smaller companies who may be the most vulnerable during the current oil crisis.

Related: Small Oil Companies Express Optimism

Today, I am featuring an interview with independent geologist, Walter Light, to get his perspective on the current downturn.

Thanks for taking a few minutes to give me your perspective on what is happening in your sector. Tell me a little about yourself.

I am an independent geologist and formed Thunder Exploration, Inc. in 1981. We like to see ourselves as a prospect-generating shop with a desire to follow our prospects all the way to production in the terms of moving forward and helping operators. That is what our focus has been for the last 30 years; generate oil and gas drilling projects, market them to the industry and then stay involved with details such as well planning, execution, evaluation and recommendation on completing a successful well.

How have low crude prices affected your work as a geologist?

Well, probably the same as in the rest of the industry. Having been in the business a long time we have the benefit of general stability in our specific business world. But in general, we do see a reduced cash flow into the business.

If you want to continue to drill wells in this environment, you have to get a feel that the cost to do so is commensurate with the price of the commodity. In the free fall pricing environment that we have experienced, nobody’s really been willing to reach up and grab that “falling knife”, as it’s been described-whether it is buying equities in the oil and gas industry or putting deals together or hiring third party services.

Everyone is still trying to correct and to understand if we are at the bottom or not. So generally I think it has slowed the business down and those companies that don’t have debt service and adequate cash flow behind what is required to run their business, they can get into a slower mode of doing business. That’s kinda where we are; kind of a breathing room.

There is time to take a breath, stand back and look at what you have done over the last several years. And if you want to drill new wells, those wells have to be commensurate with the current price. So we are focusing on taking working interest in other people’s deals but also in our generating mode looking at conventional wells, vertical wells and/or horizontal wells that don’t require hydraulic fracturing, because that is a major expense. Or vertical wells that don’t require big completion costs like occur when you hydraulically crack a well. So there are a lot of plays in the $40-50 range where we can play.

It does cause a re-step back and a slow down and a re-think. We are probably just going to try to continue doing business just as we have with those modifications until we get a feel for where the bottom is and then the service companies will have to adjust their pricing, particularly all of the services that are required for fracking. Halliburton, Baker Hughes, Schlumberger, all these companies that provide a lot of services on the completion side, will have to correct pricing if they wanna keep busy. And that takes a little while for them to adjust, but they will.

Walter says that his company is, “Pretty much business as usual at a slower pace and a slight alteration in the targets. But in the short term, we will probably hold off where we’ve been involved for awhile and that is Eagle Ford, that require fracking. Now we may participate in some wells that get  drilled and hold off on the fracking part until the wells are completed, that is stable, with pipe in the ground but not producing until fracking companies adjust their price to the current market.”

You said you have been through this before? Historically, are there any good things that come out of these downturns?

Lots of them. For one thing, it does help everyone to adjust; it forces the service companies to adjust their prices and forces operators to become more efficient in their drilling and recovery methods. So horizontal drilling and fracking are an efficient way to recover light carbons that are more difficult, but even with that spectrum there are things you can do to increase the efficiency of recovering and lower the cost and recover hydrocarbons.

Also, we have been in a frenzy in the Eagle Ford since about 2009. First it was land grab and then it was the intensity of the activity which drove the service company prices up. We’ll get an adjustment downward in pricing, it will give people and operators and geologists like me time to sit back and think about what they have done over the last few years and if they can improve their methods and monitor their existing production. During the frenzy of hitting wells, getting the first wells drilled on a lot of these leases.

That is a fantastic question because it flips it around from a negative to what are the positive things that will come out of this. It will force us as an industry to become more efficient in everything that we do and try to think of new ways. There will be new technology that will come out of this downturn because people want to think of how to do it cheaper, quicker, better and less costly.

For more information about Thunder Exploration, email wthunderx at aol.com

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Eagle Ford Rig Count Continues to Fall http://eaglefordshale.com/news/eagle-ford-rig-count-continues-to-fall/ http://eaglefordshale.com/news/eagle-ford-rig-count-continues-to-fall/#respond Sat, 25 Apr 2015 01:39:39 +0000 http://eaglefordshale.com/?p=7779 Eagle Ford Rigs Drop

Eagle Ford Rigs Drop

The Eagle Ford Shale rig count fell by seven this week ending at 129 rigs running across our coverage by midday Thursday.

In recent Eagle Ford news, the Texas legislature last week to move forward with House Bill 40, which strips local authorities of power to regulate oil and gas in their own cities.

Read more: “Denton Fracking Bill” Sails Through House

The U.S. rig count fell again this week by another 22 ending at 932 rigs running by midday Friday.  A total of 225 rigs were targeting natural gas (and increase of eight  from the previous week) and 703 were targeting oil in the U.S. (31 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 393 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

By Midday Friday, natural gas rigs increased by one, totalling 18 rigs. Natural gas prices decreased $.10 from the previous week landing at at $2.5363/mmbtu by week’s end. .

The oil rig count fell to 111 rigs this week.  WTI oil prices increased $1.60 from the previous week, trading at $57.34/bbl on Friday afternoon.. A total of 123 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and vertical rigs increased to seven.  Karnes (19), Webb (19), LaSalle (17) and DeWitt (16),  have the highest rig counts this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
KARNES 19 19 DUVAL 1 1
WEBB 18 19 MADISON 1 1
LA SALLE 16 17 BASTROP 1 1
DE WITT 19 16 AUSTIN 0 0
DIMMIT 13 12 BEE 0 0
GONZALES 12 10 COLORADO 0 0
MCMULLEN 10 8 GOLIAD 0 0
LAVACA 5 6 GRIMES 0 0
ATASCOSA 5 5 LEE 0 0
FRIO 5 4 LEON 0 0
ZAVALA 3 3 MAVERICK 0 0
BURLESON 2 2 MILAM 0 0
FAYETTE 2 2 ROBERTSON 0 0
LIVE OAK 3 2 WASHINGTON 0 0
BRAZOS 1 1 WILSON 0 0

 

Eagle Ford Shale News

Eagle Ford Production Up Slightly in March

Texas Earthquakes Linked to Fracking

Eagle Ford Consortium 2015

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Read more at bakerhughes.com

 

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Eagle Ford Production Up Slightly in March http://eaglefordshale.com/news/eagle-ford-production-up-slightly/ http://eaglefordshale.com/news/eagle-ford-production-up-slightly/#respond Thu, 23 Apr 2015 13:57:10 +0000 http://eaglefordshale.com/?p=7775 Eagle Ford Produced 1.6 Million bpd in March

Eagle Ford Produced 1.6 Million bpd in March

Oil production in the Eagle Ford increased 28 percent from the same month last year, averaging 1.6 million barrel a day in March.

Relates: Eagle Ford Production Expected to Decline 

These findings are from Platt’s Bentek Energy, who also reported that there an increase in production of 17,000 barrels per day for the combined shale formations in North Dakota and Texas in March versus February. This slight increase of 1% may signal a slowdown in the record production that has led to an oil surplus. Platt’s daily price assessment shows the value of oil out of the Eagle Ford is up 25% since mid-March due to an average price for the year is $53.30 barrels per day.

Sami Yahya, Bentek energy analyst said that “Producers the Eagle Ford are still maintaining their production levels by high-grading their acreage and pushing for better efficiencies. The current average economic return for the two basins is 17%. However, the downside risk is that some producers may elect to increase their number of drilled-but-uncompleted wells in the near term—until they figure out their cash flow status—which will further flatten or bring down production levels.”

Learn more about Oil and Gas Production Basics in Non-Technical Language

Read more at platt’s.com

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Texas Earthquakes Linked to Fracking http://eaglefordshale.com/news/texas-earthquakes-linked-to-fracking/ http://eaglefordshale.com/news/texas-earthquakes-linked-to-fracking/#respond Wed, 22 Apr 2015 12:03:08 +0000 http://eaglefordshale.com/?p=7767 Texas Earthquakes

Texas Earthquakes

A new study published Tuesday in the scientific journal, Nature Communications, confirms that oil and gas activities are likely to blame for a series of earthquakes in Azle  and Reno Texas.

Related: Is Eagle Ford Production Causing Earthquakes?

After a year-long investigation, researchers at SMU present findings that contradict the Texas Railroad Commission who have continued to deny the link between oil and gas operations and seismic activity.

Before 2008, Texas earthquakes were rare and both Azle and Reno experienced none. Since then, analysts have recorded over 150 significant quakes in North Texas including two magnitude 3.6 tremors in November and December of 2013.

According to the report, “Regional geologic interpretations and historical accounts of regional seismicity independently suggest that natural tectonic stress changes represent an unlikely cause of the Azle earthquakes. The analysis therefore indicates subsurface stress changes associated with brine production and wastewater injection represents the most probable cause of recent earthquakes in the Azle area.”

Related: Texas Quakes Alarm Residents 

Azle and Reno have not expereinced any more quakes since 2013, but other Texas locales aren’t so lucky. A series of quakes rattled residents in the north Texas community of Irving in January ranging in intensity from a 2.6-3.7 on the richter scale.

Read full report at nature.com

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Eagle Ford Consortium 2015 http://eaglefordshale.com/news/eagle-ford-consortium-2015/ http://eaglefordshale.com/news/eagle-ford-consortium-2015/#respond Tue, 21 Apr 2015 13:05:33 +0000 http://eaglefordshale.com/?p=7761 Eagle Ford Consortium 2015

Eagle Ford Consortium 2015

The fourth annual Eagle Ford Consortium, scheduled for May 27-29 in San Antonio, will address issues that affect Eagle Ford Shale counties.

New on the conference agenda is a pre-conference program on Mexican energy reform. Speakers will look at how border counties will be impacted by the new Mexican energy reform laws and how small and medium businesses can tap into the opportunities and be connected to the reforms.

Related: Eagle Ford Gas Headed to Mexico

Related: More Pipelines Cross Texas-Mexico Border

Keynote speakers for the conference will include Texas Railroad Commission Chair Christi Craddick and Texas Workforce Commission Chairman Andres Alcantari. Topics include:

  • An Optimistic View of the Economy
  • State of the Workforce in the Eagle Ford Shale
  • Regional Coordination of Emergency Responses Resources
  • Roads & Road Safety
  • Environmental
  • Workforce & Education
  • Applying Current Technology in the Oil & Gas Industry
  • Economic Development & Creative Financing
Eagle Ford Consortium Chairman Leodoro Martinez told the San Antonio Business Journal that once shale oil opens up for foreign investment later this year, midstream companies in Texas will have lucrative business opportunities to build up Mexico’s infrastructure. “What it does for our shale area, is that it opens up a lot of activity for our border communities such as Eagle Pass, Del Rio and Laredo,” Martinez said.

The Eagle Ford Consortium addresses issues that are the result of the economic impact of the oil and gas exploration that is taking place within the Eagle Ford Shale. For more information about membership or to register for the conference, go to eaglefordconsortium.org

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“Denton Fracking Bill” Sails Through House http://eaglefordshale.com/news/denton-fracking-bill-sails-through-house/ http://eaglefordshale.com/news/denton-fracking-bill-sails-through-house/#respond Mon, 20 Apr 2015 12:59:06 +0000 http://eaglefordshale.com/?p=7758 Anti-Fracking Demonstrators

Anti-Fracking Demonstrators

The Texas legislature voted Friday to move forward with House Bill 40, which strips local authorities of power to regulate oil and gas in their own cities.

Related: Fracking in Texas Cities: Who’s the Boss?

In a 122-18 vote, the the Texas House of Representatives gave its overwhelming approval to preempt city laws concerning oil and gas activity, including hydraulic fracking. The Denton Fracking Bill allows the state to eliminate local rules that are not deemed “commercially reasonable.”

After only three hours of debate, the house was able to shoot down all of the proposed amendments that attempted to add additional local control for public safety and setbacks.

The Texas Oil and Gas Association called the proposal “balanced, fair and essential to ensure that the state’s biggest job creator can continue to operate responsibly under robust and predictable regulation.”

But there are many dissenters including Rep. Sylvester Turner, D-Houston, who called the bill “a goldmine for lawyers.”

Luke Metzger, Director of Environment Texas told the Fort Worth Star Telegram, “This is a dangerous power grab by Big Oil to stomp out the rights of communities to protect themselves from the worst impacts of dirty drilling,”, said in a statement. “They won’t settle for just overturning the Denton ban but are taking aim at ordinances across the state that limit drilling near homes, schools and parks as well as many other health and safety standards.”

The bill still has to make its way through the Texas Senate before it goes before the Governor and becomes law. 

Read more at legis.state.tx.us

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Eagle Ford Rig Count Declines by One http://eaglefordshale.com/news/eagle-ford-rig-count-declines-by-one/ http://eaglefordshale.com/news/eagle-ford-rig-count-declines-by-one/#respond Fri, 17 Apr 2015 10:41:58 +0000 http://eaglefordshale.com/?p=7754 Rig Counts Continue Decline

Rig Counts Continue Decline

The Eagle Ford Shale rig count fell by one this week ending at 136 rigs running across our coverage by midday Thursday.

In recent Eagle Ford news, another round of layoffs hit the Texas energy industry early this week as manufacturers and service companies struggle with the global crude collapse.

Read more: Layoffs Claim 343 More Texas Jobs

The U.S. rig count fell another 34 to 954 rigs running as of today. A total of 217 rigs were targeting natural gas (a decrease of eight  from the previous week) and 734 were targeting oil in the U.S. (26 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 412 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

By Midday Friday, natural gas rigs increased by one, totalling 17 rigs. Natural gas prices increased $.12 from the previous week landing at at $2.63/mmbtu by week’s end. .

The oil rig count fell to 136 rigs this week.  WTI oil prices increased $4.10 from the previous week, trading at $55.74/bbl on Friday afternoon.. A total of 140 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and vertical rigs increased to six.  Karnes (19), DeWitt (19), and Webb (18) and LaSalle (16),  have the highest rig counts this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
DE WITT 19 19 DUVAL 0 1
KARNES 20 19 MADISON 1 1
WEBB 17 18 BASTROP 1 1
LA SALLE 17 16 AUSTIN 0 0
DIMMIT 13 13 BEE 0 0
GONZALES 12 12 COLORADO 0 0
MCMULLEN 10 10 GOLIAD 0 0
ATASCOSA 3 5 GRIMES 0 0
FRIO 5 5 LEE 0 0
LAVACA 5 5 LEON 0 0
LIVE OAK 5 3 MAVERICK 0 0
ZAVALA 4 3 MILAM 0 0
BURLESON 2 2 ROBERTSON 0 0
FAYETTE 2 2 WASHINGTON 0 0
BRAZOS 1 1 WILSON 0 0

Eagle Ford Shale News

1,400 Uncompleted Wells in the Eagle Ford

Researchers Gather Data in Texas Skies

Texas Economic Index Down

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.


Read more at bakerhughes.com

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1,400 Uncompleted Wells in the Eagle Ford http://eaglefordshale.com/news/1400-uncompleted-wells-in-the-eagle-ford/ http://eaglefordshale.com/news/1400-uncompleted-wells-in-the-eagle-ford/#respond Thu, 16 Apr 2015 15:48:12 +0000 http://eaglefordshale.com/?p=7752 1400 Wells Not Completed

1400 Wells Not Completed

In a recent report, the IHS revealed that Eagle Ford producers have built a large inventory of over 1,400 wells that have been drilled but not completed.

Related:Eagle Ford Rig Count Drops to 137

Drilled but uncompleted wells (DUCs) offer an attractive economic alternative for producers who are looking for ways to cut costs in this crude pricing slowdown. A DUC can be converted to a producing well for 65% of the cost of new drilling, which will likely incentivize operators to work through these inventories as oil rices rebound.

BHP, Chesapeake, Anadarko, EOG Resources, ConocoPhillips and Pioneer Resources own nearly 40 Percent of the optimal DUC wells in the Eagle Ford. The report estimates that BHP, ConocoPhillips and Pioneer Resources have better potential in their delayed wells and the greatest available options of any operators in the play.

Raoul LeBlanc, senior director of research at IHS Energy, said the drilled but uncompleted wells have two advantages under current market conditions. “First, the drilling costs of these wells were already incurred by operators prior to 2015, and the completion costs — which comprise the majority of well costs — can be negotiated at a cheaper rate since completion crews are now both available and available at cheaper rates. Second, if completion costs are fairly consistent in the play, then it stands to reason that wells with higher production will yield better returns on capital.

Read more at ihs.com

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Researchers Gather Data in Texas Skies http://eaglefordshale.com/news/researchers-gather-data-in-texas-skies/ http://eaglefordshale.com/news/researchers-gather-data-in-texas-skies/#respond Wed, 15 Apr 2015 15:45:54 +0000 http://eaglefordshale.com/?p=7748 NOAA Studies Eagle Ford Emissions

NOAA Studies Eagle Ford Emissions

Scientists from the National Oceanic and Atmospheric Administration (NOAA) are flying over the Texas oil and gas fields to gather data to measure air pollution in the Eagle Ford.

Related: Eagle Ford Study Shows Significant Increase in Pollution Through 2018

The research in Texas is  part of a larger project that includes over 15 research flights out of Colorado and Texas between March and May to measure air pollution from America’s biggest shale fields. The project tracks things like the excessive production of ozone and methane, a greenhouse gas far more potent than even carbon dioxide.

A nationwide study published in early April showed that methane emissions across the United States have dropped significantly in the past two decades and are much lower than current Environmental Protection Agency  estimates. But the scientists from NOAA are focused on understanding the variability between the leaks from one field to another. Lead research, Joost de Gouw cites many factors that cause a variability, such as what is being pumped from the ground, the techniques, equipment and the amount of regulation in each state.

Related: Methane Emissions Drop | Bakken Shale

“Lead researcher, Joost de Gouw said methane emissions are of particular interest. Natural gas, he said, is mostly methane. Although carbon dioxide is more abundant in the atmosphere, when compared molecule to molecule, methane is a more potent greenhouse gas.”

The research takes place high above the ground in “Miss Piggy”, an airplane that has been customized as a flying lab. Once airborne, teams in the air and on the ground measure readings upwind and downwind of oil and gas activity. The researchers are using aircraft equipped with chemical instruments, and say that once their data is collected, it will take more than a year to synthesize.

Read more at npr.org

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Layoffs Claim 343 More Texas Jobs http://eaglefordshale.com/news/more-texas-layoffs/ http://eaglefordshale.com/news/more-texas-layoffs/#respond Tue, 14 Apr 2015 13:25:09 +0000 http://eaglefordshale.com/?p=7742 Texas Job Cuts

Texas Job Cuts

Another round of layoffs hit the Texas energy industry early this week as manufacturers and service companies struggle with the global crude collapse.

Related: Baker Hughes Closes Another Texas Location

Related: Talisman Energy Cuts Jobs

The largest private well completion company in North America, FTS International, laid off 194 employees from its Bryan location last week.

FTS spokeswoman, Lynaia Lutes said “Although this closure affects a small percentage of our total workforce of approximately 4,000 employees, we do regret that current circumstances have resulted in this impact on our people.”

The Texas Workforce Commissions also confirmed that Lufkin Industries removed 149 workers in February and March. The company designs, manufactures and services equipment for the oil field.

The Federal Reserve Bank of Dallas conducts a monthly survey of manufacturing executives and the responses confirm that low crude prices are causing a slowdown in the state’s factories. According to a recent survey of 112 Texas manufacturers, the production index fell in March and manufacturers were pessimistic about broader business conditions. A majority of executives reported a decrease in new orders, increased layoffs and falling prices for prices for finished goods.

“Our oil and gas customers have just stopped producing,” one executive from the fabricated metal manufacturing sector responded. “This is not an unusual event for our oil and gas customers, but what feels different about this time is no one knows when production will restart. Typically we have to ride out 60 to 90 days, and this one looks like six months or more.”

Read more at fuelfix.com

 

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