Eagle Ford Shale News

1,400 Uncompleted Wells in the Eagle Ford

DUCs Cheaper than New Drilling
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

Researchers Gather Data in Texas Skies

NOAA Measures Eagle Ford Shale Emissions
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

Layoffs Claim 343 More Texas Jobs

Manufacturering and Service Companies Respond to Crude Collapse
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

 

Texas Economic Index Down

Comerica Bank Announces Three Month Decline
Texas Economic Index 2015

Texas Economic Index 2015

Comerica Bank’s economic index showed a decrease in activity for the first three months of 2015. For January, the index was down to 106.3, a .9% decrease from December. Though this is the first three-month decline since June 2009, the index is still 34 points above the all-time low.

The report showed that five of the eight index components were down in January including exports, claims for unemployment insurance, housing starts, rig count and hotel occupancy. Other markets such payroll employment, house prices and sales tax continued to show positives numbers.

The Texas Workforce Commission reported that the state added 7,100 jobs in February, including 6900 oil and gas jobs. This was the smallest monthly job gain since October 2011. Read more here.

Low crude oil prices and a decline in drilling activity are at the center of this economic slowdown.

Robert A. Dye, Ph.D., Senior Vice President and Chief Economist at Comerica Bank stated “Obviously, the more than 50-percent drop in oil prices from mid-year 2014 to present is a significant drag on the Texas economy,” Dye said in a statement. “We know the payroll job growth for the state has slowed through February and the weekly rig count numbers have declined into March, so we expect to see more evidence of a downshift in the Texas economy in the months ahead.”

Read more at comerica.com

 

 

Heartland Energy Group Opens Another Location

Company Offers Green Products Throughout the United States

Heartland Energy Group, Ltd (HEG) is excited to announce our Grand Opening in San Antonio, TX. In addition to our Texas plant, we have other facilities strategically placed throughout the United States to enable us to service all your Oil and Gas needs!

HEG offers proven technologies for the safe replacement of dangerous acids, caustics, solvents, surfactants and other companion products. Our green chemistries meet or exceed the EPA’s strict approval guidelines and are formulated with the ingredients listed on CleanGredients and the EPA’s Design for the Environment inventory list. These formulas represent a series of green chemistries that are functional yet safe alternatives, not only for the oil and gas companies who use them, but the citizens who live and work around major oil and gas activity. DfE approvals serve as a benchmark to answer the ongoing environmental questions about the safety of the products that are being used in our world daily.

2015-04-13_0832HEG’s products represent a significant advancement in allowing companies to “Go Green” and to offer a truly effective and safer alternative to problems that have plagued the industry for decades. These problems include hazardous transportation issues, containment, exposure and safety of personnel to toxic chemicals, groundwater contamination issues caused from hydraulic fracturing and the destruction of industry related equipment due to corrosive chemistries. The solution? Green chemistry products like the HCl substitute created by the experts at Heartland Energy Group, Ltd.

Steve Rowley, President of HEG, was recently asked about the growing company’s continued success. He offered the following comment, “We are extremely blessed, honored and excited about having bricks and mortar in South Texas. We are a very conservative company and could no longer ignore the enormous demand that our customers have been placing on us about being in Texas. We have responded and our Texas customers will recognize an immediate savings on freight expenses alone and the ability to receive inventory right away. We look forward to serving the Texas area and are currently looking at other opportunities in the Bakken.”

2015-04-13_0831HEG will continue to manufacture, innovate and pioneer new “GO GREEN” technologies that truly improve our environment and offer functional replacements for harsh acids, caustics and solvents, notably our flagship HCl substitute. This technology will further enhance and eliminate the need for dangerous chemicals associated with stimulation and production chemicals. Most importantly, we listen to the needs of our customers and implement environmentally safe solutions. Our green technologies, personal touch and commitment to quality set us apart from other companies in our growing industry.

OUR PROVEN GREEN TECHNOLOGIES WILL LEAD THE WAY TO A SAFER INDUSTRY AS WELL AS SAFER COMMUNITIES!

Eagle Ford Rig Count Drops to 137

Total U.S Rigs Dip Below 1,000
Texas Rigs Continue to Decrease

Texas Rigs Continue to Decrease

The Eagle Ford Shale rig count fell by 13 this week ending at 137 rigs running across our coverage by midday Thursday.

In recent Eagle Ford news, Mexico plans to move forward on pipeline initiatives that will impact the Eagle Ford in Texas despite low crude prices. The state power company (CFE) has initiated an aggressive construction campaign that includes $3.3 billion to be spent on 12 natural gas and electricity projects.

Read more: More Pipelines Cross Texas-Mexico Border

The U.S. rig count fell another 40 to 988 rigs running as of today. A total of 225 rigs were targeting natural gas (an increase of three from the previous week) and 760 were targeting oil in the U.S. (52 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 427 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

Natural gas rigs increased by three and totaled 16 rigs by midday Friday with  Natural gas prices decreased $.20 from the previous week landing at at $2.51/mmbtu by week’s end. .

The oil rig count fell to 137 rigs last week.  WTI oil prices increased $2.50 from the previous week, trading at $51.64/bbl on Friday afternoon.. A total of 134 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and vertical rigs are at three.  Karnes (20), DeWitt (19), and Webb (17)and LaSalle (17),  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 24 20 MADISON 1 1
DE WITT 21 19 BASTROP 0 1
LA SALLE 17 17 AUSTIN 0 0
WEBB 19 17 BEE 0 0
DIMMIT 14 13 COLORADO 0 0
GONZALES 11 12 DUVAL 1 0
MCMULLEN 13 10 GOLIAD 0 0
FRIO 4 5 GRIMES 0 0
LAVACA 5 5 LEE 0 0
LIVE OAK 6 5 LEON 0 0
ZAVALA 3 4 MAVERICK 0 0
ATASCOSA 5 3 MILAM 0 0
BURLESON 3 2 ROBERTSON 1 0
FAYETTE 1 2 WASHINGTON 0 0
BRAZOS 1 1 WILSON 0 0

Eagle Ford Shale News

Texas Job Growth Slows

Baker Hughes Closes Another Texas Location

NuStar Announces Open Season

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

Texas Job Growth Slows

6,900 Oil Jobs Lost this Year
Texas Job Growth Slows

Texas Job Growth Slows

As crude prices continue to bounce around, the effects of sustained low prices are showing up in slowed job growth throughout Texas.

Related: Low Oil Prices and the Texas Economy

The Texas Workforce Commission reported that the state added 7,100 jobs in February, which was the smallest monthly job gain since October 2011. The biggest hit came in the oil industry where 6,900 jobs were lost in January and February.

Low crude prices means reduced activity and the decreased demand for oilfield equipment and services means layoffs for many companies that service producers. These companies are reporting significant revenue losses as drilling activity and oil prices have steadily declined. Recent layoffs in the service sector include:

  • Offshore drilling contractor Seadrill will cut 159 jobs
  • Tenaris will cut 133 workers from its northwest Houston plant
  • AFGlobal Corp. will cut 89 workers from the company’s North Houston facility
  • DHW Well Service Inc. will cut 55 workers from a fabrication shop in Victoria
Gov. Greg Abbott issued a statement saying Texas “continues to be a model for economic growth and prosperity across the nation. However, there is more we can and must do. I am working with the legislature to ensure we pass legislation that lowers the tax burden on businesses, guarantees long-term funding for transportation, and provides economic development opportunities – including in higher education – to further diversify our economy. “ 

Despite the slowed job growth, the Texas consumer confidence index increased 4.7 percent over this time last year and the state’s unemployment rate dropped to 4.3 percent, down from 4.4 percent in January 2015. 

Read more at twc.state.tx

Baker Hughes Closes Another Texas Location

Layoffs Continue as Energy Giant Prepares for Merger
Baker Hughes Cuts Jobs

Baker Hughes Cuts Jobs

Baker Hughes pink slips are starting to add up. The latest casualties are the 54 employees who will be out of work when Baker Hughes permanently closes its office in Bryan, TX.

Since the first of the year, Baker Hughes has closed other Texas locations including operations in Mineral Wells (110 employees), Kilgore (58) and Alice (51).

Related: Energy Giants Announce Layoffs 

Baker Hughes representatives continue to say that job cuts are part of a company wide workforce reduction of an estimated 7000 workers in order to minimize costs during this downturn in oil prices. Also at play is Baker Hughes’ upcoming merger with Halliburton, where it is likely that both companies will combine operations and eliminate redundancies.

Related: Halliburton to Merge With Baker Hughes

The Houston Chronicle reported in December that the combined company expects to make $2 billion in cuts, with most of the job loses coming from operations.

Baker Hughes CEO Martin Craighead told the Houston Chronicle that, “We don’t want to be insensitive to the uncertainty and acknowledge that the fact that anytime you have institutions of this size coming together there will be some adjustments, but I think it would be premature to speculate” 

 

More Pipelines Cross Texas-Mexico Border

New Initiatives Continue Despite Low Oil Prices
Mexico's Oil Production Declines

Mexico’s Oil Production Declines

Despite low oil prices, Mexico will move forward on pipeline initiatives that will impact the Eagle Ford in Texas.

Jumping on the opportunities afforded by the new energy reform measures, the state power company (CFE) has initiated an aggressive construction campaign that includes $3.3 billion to be spent on 12 natural gas and electricity projects.

Even though oil prices have tanked, the state power company (CFE) plans to move forward on a couple of these projects including the $450 million Colombia-Escobedo pipeline. This project, set to begin in June 2017, will include the development and construction of 155 miles of pipe to run from the town of Colombia in the US border to Escobedo in Mexico’s Nuevo León state. The pipeline will have a capacity of 500Mf3/d and will transport natural gas from Webb County, Texas to Nuevo León state where it will be connected to the country’s pipeline network.

Related: Eagle Ford Gas Headed to Mexico

The oil industry has historically been a key factor in Mexico’s economy, accounting for 13% of the nations export revenue in 2013. But production has fallen over the last 10 years and in an effort to open the Mexican energy sector to competition and fuel increased investment in infrastructure, the country has initiated historic energy reform measures.

Crucial to these reforms is insuring Mexico’s access to abundant, low-cost US natural gas through expanded pipelines on both sides of the border.

“Mexico has suffered a deficit of natural gas and could not import enough gas to satisfy national demand,” Wood said at the Gulf Coast Power Association meeting in Houston yesterday. “Pipeline projects to carry low-cost US natural gas into Mexico will help solve the supply question, Wood said. “That may be the single biggest factor that is changing Mexico’s electric sector,” he said.

Related: PEMEX Shale Play Spending to Grow to $200 million

NuStar Announces Open Season

New Construction Provides Opportunities in McMullen County
NuStar: South Texas Crude Pipeline System

NuStar: South Texas Crude Pipeline System

NuStar energy announced this week that it has opened up space for new shippers in its South Texas Crude Oil Pipeline System during an open season scheduled for April 2-23rd.

During these open seasons, shippers can reserve space in a pipeline by promising a long-term financial commitment to the project. NuStar’s current project is a new origin point to enter the South Texas Crude Oil Pipeline System and is located at highway 99 in McMullen County. This location will provide space for an additional 10,000 barrels per day to potential shippers.

Related: NuStar Energy Planning Eagle Ford Oil Pipeline Expansion

Interested shippers seeking pipeline space in Eagle Ford Shale can receive more information about rates, service and routes by contacting Rick Webb, Vice President-Business Development, at 210.918.2000.

NuStar Energy is based in San Antonio and is one of the largest independent liquids terminal and pipeline operators in the nation. The company’s South Texas Crude Oil Pipeline System consists of over 200 miles of crude transmission and gathering lines throughout Texas including from LaSalle, McMullen, Frio and Live Oak Counties.

Read more at NuStarEnergy.com

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