Eagle Ford Shale News

Eagle Ford Rigs Drop to 124

State to Trump Local Authority for Oil & Gas Activity
Eagle Ford Rigs Drop

Eagle Ford Rigs Drop

The Eagle Ford Shale rig count fell this week by one with 124 rigs running across our coverage area by midday Friday,

In recent Eagle Ford news, Texas Governor Greg Abbott signed the popularly named, “Denton Fracking Bill” on Monday that allows state authority to override local decisions about oil and gas regulations.

Read more:“Denton Fracking Bill” Now Law

The U.S. rig count fell by three, ending with 885 rigs running by midday Friday.  A total of 222 rigs were targeting natural gas (a decrease of one from the previous week) and 659 were targeting oil in the U.S. (one less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)   373 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 in the Eagle Ford fell to 21 this week and natural gas prices traded at $2.89/mmbtu, an decrease of  $.13 from the previous week.

The oil rig count increased to 103 with WTI oil prices inching upwards this week to $59.72, an increase of $.21. A total of 116 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and vertical rigs stayed at eight.  Karnes county leads Eagle Ford drilling this week running 21 rigs, while LaSalle (19) and Webb (18) following closely. 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 21 BRAZOS 1 1
LA SALLE 16 19 COLORADO 2 1
WEBB 19 18 DUVAL 1 1
DE WITT 17 15 MADISON 1 1
DIMMIT 13 12 ZAVALA 1 1
GONZALES 7 7 BASTROP 1 1
FRIO 6 6 AUSTIN 0 0
LAVACA 7 6 BEE 0 0
MCMULLEN 5 4 GOLIAD 0 0
ATASCOSA 2 2 GRIMES 0 0
BURLESON 2 2 LEE 0 0
FAYETTE 2 2 LEON 0 0
LIVE OAK 2 2 MAVERICK 1 0
ROBERTSON 2 MILAM 0 0
ZAVALA 3 2 WASHINGTON 0 0
BRAZOS 1 1 WILSON 0 0

Eagle Ford Shale News

Eagle Ford Well Explodes

Chesapeake Headed to Arbitration

Eagle Ford Family Wants Their Day in Court

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

 

Eagle Ford Well Explodes

Karnes County Residents Evacuated

An Eagle Ford oil well exploded Tuesday afternoon and forced the evacuation of several nearby homes.

Related: Eagle Ford Rig Worker Injured in Explosion Dies

The well, operated by Enaca Corp was located off of FM 792 about four miles east of Karnes City, TX. Karnes County, Sheriff Dwayne Villanueva said the well pump that exploded was shut off but hydrogen sulfide gas still escaped. No one was reported injured. The latest update on Wednesday at 3pm was that the flow of gas has been slowed and the company was working to shut it down completely.

An Encana spokesman affirmed :that the company is providing accommodation and incidental expenses to evacuated residents until the well is shut down and Encana and the Karnes County Sherriff’s Department determine it’s safe for them to return to their homes.”

Encana officials released an statement regarding the incident:

At approximately 3:30 p.m. CST on May 19, 2015 Encana experienced a well control situation at the Dromgoole 8BH well located near the intersection of Highway 792 and Highway 343 approximately 4 miles east of central Karnes City, Texas.

No injuries have been reported from the location. We immediately activated our emergency response plan. As a precaution, neighbors living in the immediate area were evacuated. Local authorities are on location.

We are monitoring for the presence of H2S. Our main priority is to ensure the safety of our staff and community. We will continue to monitor the area.

We are working to shut down well and will provide additional information as it becomes available. The cause is not known at this time.

We will work to determine the exact cause and will conduct a comprehensive review into what occurred.

 

“Denton Fracking Bill” Now Law

State Overides Local Decisions to Regulate Oil & Gas
Anti-Fracking Demonstrators

Anti-Fracking Demonstrators

Texas Governor Greg Abbott signed the popularly named, “Denton Fracking Bill” on Monday that allows state authority to override local decisions about oil and gas regulations.

House Bill 40 sailed through the Texas House and Senate over the last few weeks as legislators responded to Denton’s ban on hydraulic fracking in the city limits that local authorities passed in November. The bill seeks to clarify the lines between ofr gets to decide about these activities.

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

Responses to the the announcement have been no surprise, with oil and gas companies hailing the bill’s passage.

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.”

However, local governments and environmental groups are outraged and believe they now have no control to protect property values and quality of life from rampant drilling.

Luke Metzger, director of Environment Texas, said in a statement that “By advocating for and signing this bill, Gov. Abbott has succeeded in seizing power away from local governments working to protect us from the real dangers of dirty drilling,”

Read more at legis.state.tx.us

Chesapeake Headed to Arbitration

Court Orders Company to Settle Dispute with Former CEO
Chesapeake Energy to Arbitrate with Aubrey McClendon.

Chesapeake Energy Must Settle Dispute with Former CEO

A district court judge in Oklahoma has ordered Chesapeake Energy to enter arbitration in an attempt to settle its dispute with American Energy Partners.

In a lawsuit filed in February, Chesapeake accused its former CEO, Aubrey McClendon, of stealing important trade secrets before leaving the company in 2013 and then using the confidential information to build American Energy Partners. Read more: Chesapeake Sues American Energy Partners 

Attorneys for American Energy accused Chesapeake of using gimmicks to stay out of arbitration and Judge Thomas Prince agreed. Prince granted the request for arbitration, though it is unclear when it will begin.

American Energy states in a court filing that “Chesapeake cannot escape its contractual commitment to arbitrate through the procedural gimmick of leaving Mr. McClendon’s name off.”

Last week, Chesapeake Energy reported 2015 first quarter loss of$3.8 billion. In spite of huge losses, CEO Yet Doug Lawler remained upbeat and focused on Chesapeake’s innovations.

Chesapeake is active all across the Eagle Ford including Atascosa County, Dimmit County, Duval County, Frio County, Goliad County, LaSalle County, McMullen County, Washington County, Webb County and Zavala County.

Eagle Ford Family Wants Their Day in Court

Did Drilling Cause Health Issues?
Appeals Court Hears Arguments Against Oil Companies

Appeals Court Hears Arguments Against Oil Companies

A Texas Court of Appeals heard arguments last week from the attorneys of an Eagle Ford family who wants their day in court.

In a lawsuit filed in 2013, Michael and Myra Cerny claim that oil drilling near their Karnes county residence has caused numerous health issues and made their home unlivable. The case was thrown out last year by Judge Stella Saxson who ruled the family did not prove their allegations that gas emissions caused the family’s issues.

All parties are back in court hoping to persuade the three-judge panel that the Cerny family deserves a jury trial.

Macy Stokes, one of the attorneys representing Marathon Oil and Plains Exploration, argued that nothing has changed since the August ruling and that “they still have to prove causation, that the emissions caused this inconvenience, that the emissions actually made it to their property and inconvenienced them.”

Other recent Texas legal battles between oil companies and mineral owners include a case before the Texas Supreme Court last month where Chesapeake challenges a 2014 Appeals Court ruling that would cost them at least $1million. At the heart of the case is the property owners (Hyders) allegations that Chesapeake improperly deducted money from their royalty checks to cover post-production costs.

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Eagle Ford Rig Count Increases

Noble Energy Plans Expands into Shale Business
Eagle Ford Rig Count Increases

Eagle Ford Rig Count Increases

For the first time in months, the Eagle Ford Shale rig count increased this week.  My midday Friday, there were 125 rigs running across our coverage area.

In recent Eagle Ford news, Houston-based Noble Energy announced plans to get into the shale business by acquiring independent producer, Rosetta Resources.

Read more:Noble Energy Plans Expansion into Eagle Ford

The U.S. rig count fell by six, ending with 888 rigs running by midday Friday.  A total of 223 rigs were targeting natural gas (an increase of two from the previous week) and 660 were targeting oil in the U.S. (eight less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)   373 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 in the Eagle Ford increased to 23 this week and natural gas prices traded at $3.02/mmbtu, an increase of  $.14 from the previous week.

The oil rig count stayed flat at 101. WTI oil prices continued to inch upwards this week to $59.51, an increase of $.12. A total of 115 rigs are drilling horizontal wells, two rigs are drilling directional wells, and vertical rigs stayed at eight.  Karnes and Webb counties are both running 19 rigs this week with DeWitt (17) and LaSalle (16) following closely. 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 18 19 DUVAL 2 1
WEBB 18 19 MADISON 1 1
DE WITT 16 17 MAVERICK 0 1
LA SALLE 15 16 ZAVALA 2 1
DIMMIT 14 13 BASTROP 1 1
GONZALES 8 7 AUSTIN 0 0
LAVACA 7 7 BEE 0 0
FRIO 5 6 GOLIAD 0 0
MCMULLEN 5 5 GRIMES 0 0
ATASCOSA 2 2 LEE 0 0
BURLESON 2 2 LEON 0 0
COLORADO 1 2 MILAM 0 0
FAYETTE 2 2 ROBERTSON 0 0
LIVE OAK 2 2 WASHINGTON 0 0
ZAVALA 3 2 WILSON 0 0
BRAZOS 1 1

Eagle Ford Shale News

Sanchez Energy Reports Strong Q1

Chesapeake Energy Reveals Huge Q1 Loss

Texas Quakes Strike Again

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

Sanchez Energy Reports Strong Q1

60% Production from Eagle Ford's Catarina
Sanchez Energy Released 2015 Q1

Sanchez Energy Released 2015 Q1

Sanchez Energy announced a strong start to 2015 during it’s conference call last week, reporting they have reached new milestones for production and cost structures.

For the first quarter of 2015, Sanchez saw record production averaging 45,217 barrels of oil equivalent per day during the quarter and reported they are currently producing approximately 50,000 barrels per day. Completed well costs in all of regions of the company’s Eagle Ford operations (Catarina, Marquis and Cotulla/Wycross) are below $5.0 million, and are anywhere from 30% to 40% below costs from Q4’14.

A huge factor in Sanchez growth and success in the Eagle Ford is due to their acquisition of 106,000 acres in Catarina, TX from Dutch Shell last year. Catarina accounted for 60% of the company’s production in Q1’15.

Read more: Sanchez Nearly Doubles Eagle Ford Acreage in $639 Million Deal

Christopher D. Heinson – Chief Operating Officer and Senior Vice President talks about their success: “At the time of our IPO in December of 2011, we had production of approximately 600 barrels of oil equivalent per day. Since that time, through a combination of organic growth and strategic acquisitions, we have now grown production to approximately 50,000 barrels of oil equivalent per day and at our current pace, have well over a decade of high return drilling opportunities in our inventory.”

Q1 Eagle Ford Highlights

  • Record production averaging approximately 45,217 BOE/D
  • Executed and closed the sale of escalating working interests in 59 producing wellbores in the non-operated Palmetto Field for aggregate consideration of approximately $85 million
  • Catarina: Exceeded our first annual 50 well drilling commitment, by drilling 54 wells.
  • Catarina: successfully appraised three distinct and productive benches
  • Well costs trending down across assets, and we are now drilling and completing wells at Catarina,Cotulla, and Marquis at a cost that is approximately 30 to 40% below well costs realized in the fourth quarter 2014, with drilling and completion costs at Catarina now trending below $4.5 million.

Read more at sanchezenergycorp.com

Noble Energy Plans Expansion into Eagle Ford

Company Announces $2.1 Billion Merger with Rosetta
Rosetta-Noble Merger

Rosetta Resources and Noble Energy to Merge

Houston-based Noble Energy announced Monday it plans to get into the shale business by acquiring independent producer, Rosetta Resources. The $2.1 billion deal will allow Noble to move into over 100,000 Texas acres including 50,000 in the Eagle Ford.

After months of instability due to low and fluctuating crude prices, this deal is significant because it reveals a renewed confidence in the industry and the tenacity and resilience of U.S. producers. Many also believe it may be a tipping point for future mergers.

The Wall Street Journal speculates that “ It is possible the merger of these two shale drillers will ultimately aid a rebound in oil prices. For now, though, it demonstrates the exploration-and-production sector’s ability to keep going in adverse conditions.”

Rosetta is a leading producer in the The Eagle Ford and reported 2015 Q1 production at 58.4 MBoe/d, a 17% increase from the same period last year.  Also during the quarter, the company spent $67.8 million for drilling and completion activity: they drilled three wells were drilled, 14 completed and 11 were brought on production.

Dave Stover, Noble Energy’s Chairman, CEO, and President stated, “I am excited to announce this strategic transaction which adds two exceptional and material areas to our global portfolio.  The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S., which will expand our resource base and development inventory and further diversify our portfolio.”

Chesapeake Energy Reveals Huge Q1 Loss

CEO Boasts New and 'Dynamite' Improvements
Chesapeake Released 2015 Q1

Chesapeake Released 2015 Q1

Chesapeake Energy released first quarter financial and operational results this week, reporting a net loss of $3.8 billion and boasting of new technological innovations.

Related: Chesapeake to Reduce Spending by $500 Million

Chesapeake’s loss is even more staggering when compared to the company’s net income of $374 million one year ago. The company plans to slash drilling and completions over the rest of the year. They expects to complete fewer than 50 wells in the fourth quarter of 2015 and will drop their rig count from 40 down to about 15.

Optimism

In spite of huge losses, CEO Yet Doug Lawler remained upbeat during the earning call last Wednesday and stayed focused Chesapeake’s innovation.

Lawler commented, “We are making it public about some of this technology and improvements that we see in our assets adding 600 to 700 locations in the Eagle Ford, adding locations in other areas because of our capital efficiency, seeing the improvements in the Powder River. These are dynamite things, guys. Dynamite things.”

Eagle Ford Update

For the first quarter of 2015, Eagle Ford net production averaged approximately 113 thousand barrels of oil equivalent (mboe) per day, an increase of 7%. Other highlights include:

  • Well cost-reductions: the company anticipates completed well costs of $5.5 million by year-end 2015
  • Successfully drilled five wells with laterals in excess of 10,000 feet
  • Successfully completed down spacing tests in various sections of its acreage, adding 600 700 incremental locations to its undrilled inventory
  • Plans to test its first Upper Eagle Ford well in the 2015 fourth quarter
  •  The drilling team broke several records including drilling their deepest well with a total measured depth of just under 21,000 feet, fastest spud-to-rig-release time of 7.8 days, and lowest drilling cost well at $1.1 million
Mikell J. Pigott, Executive Vice President-Operations shared about the company’s Eagle Ford operations, “Due to market conditions, we continue to ramp down activity in the area. We reduced our rig count from 20 rigs in January to a current count of seven with the expectation to get to just three rigs by July. Strategically, we are going to take advantage of this ramp down in activity to further enhance our development planning.”

Chesapeake made other Eagle Ford news this year when Dimmett County property owner James Birkner filed a lawsuit against the company claiming that a Chesapeake employee hunted, killed and removed the white-tailed deer that roamed his property. Read more: Chesapeake Lawsuit Adds to Legal Trouble

Read the full press release at chk.com and seekingalpha.com

photo: © Larryhw |  Quarterly Financial Report Photo

Texas Quakes Strike Again

Fracking Operations Shut Down for Testing
4.0 Quake Hits North Texas

Record Quake Hits North Texas

The rumbling continues in North Texas as more earthquakes hit the area since last Thursday.

A 4.0 earthquake struck about 30 miles southwest of Dallas and is the most powerful quake since the current rash of seismic activity began in 2013. Two smaller quakes followed over the weekend, in the Mansfield (2.4) and Irving (2.7) areas.

Related: Four Texas Quakes within 24 Hours

The Texas Railroad Commission sent representatives to the area to inspect natural gas wells and disposal sites for damage and have asked for cooperation from operators in order to determine the effect of injection operations on pressures within subsurface rock formations. Bosque Disposal Systems, LLC, EOG Resources, Inc., and MetroSaltwater Disposal, Inc., Pinnergy, Ltd. have all  voluntarily agreed to temporarily shut down operations in order to conduct testing.

“We take the issue of seismicity very seriously and want to move quickly to better understand if there are actions the Commission should require of operators to protect the public, up to and including shutting down well operations,” said Dr. Craig Pearson, Commission staff seismologist. “More data is always useful in making these kinds of critical decisions that impact the public and the industry.”

Researchers from SMU are not surprised by this recent activity and are urging people to think differently about Texas quakes, which are no longer rare.  They recently spoke to a Texas legislative committee recently to garner support for better preparedness.

SMU associate professor of geophysics Matthew Hornbach in a prepared statement. “We emphasized to the House Committee on Energy Resources the need for a permanent regional network, supplemented by portable instruments, that we can deploy in a time-sensitive manner when earthquakes occur.”

Read more at rrc.tx.org

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