Eagle Ford Shale News

EIA: Eagle Ford Production Decline to Surpass Other Shale Regions

89 Rigs Needed to Maintain Production
Eagle Ford Production Expected to Decline

Eagle Ford Production Expected to Decline

The EIA (U.S. Energy Information Administration) is predicting that production in the Eagle Ford will experience a steep decline in July.

Related: Eagle Ford Counties Lead Production

Oil output in the biggest producing shale areas in the country is predicted to fall 4.7% by July 2016—compared to May 2016 levels, with the biggest drop happening in the Eagle Ford shale.

Output for the south Texas region is expected to shrink 58,000 b/d to 1.212 million b/d. Decreases in North Dakota will be 28,000 b/d and 1.024 million b/d in Wyoming’s Bakken shale,

The Eagle Ford would need 89 rigs operating to maintain current production, a long way from the 35 rigs currently running across the region.

Eagle Ford Counties still ranks highest in Texas production for crude oil, total gas and condensate, according to the Texas Railroad Commission. The agency reported that in March, production for was 77,702,710 barrels of crude oil and 638,377,189 mcf (thousand cubic feet) of total gas from oil and gas wells.

Five Eagle Ford counties were in the top ten crude oil producers for the month of March:

  1. Karnes County leads all Texas crude oil producing counties with 65,103,255 BBLS
  2. Dewitt County came in second with 5,265,583 BBLS
  3. La Salle County was third showing 4,776,538 BBLS
  4. McMullen County came in with 2,936,448 BBLS
  5. Gonzales County produced 2,690,702 BBLS

Read more at eia.gov

Karnes County Receives Gift to Repair Road

TxDOT: $569 Million Needed for Eagle Ford Roads
Eagle Ford Roads a Mess

Eagle Ford Roads a Mess

Karnes County receives generous gift to improve one of its county roads.

Related: 

Polk Operating, LLC, announced last week that is had donated recycled materials to rebuild a portion of County Road 240 in Karnes County.

Polk has a facility in Karnes that processes oilfield waste into products that can be repurposed. The company was able to create a recycled road base for the County Road 240 project, which eliminates the need to bury thousands of tons of natural resources into a landfill and potentially saved the county hundreds of thousands of dollars

“This is an integral core aspect of Polk’s business philosophy that is predicated on ‘reduce, reuse, recycle,’” said Polk Managing Member, Mickey Polk. “Our customers do not have to sacrifice profitability for a green solution, which enables Polk to be an unparalleled and synergistically positive influence for all entities involved,” he added.

All across the Eagle Ford, oil and gas activity has left a mess of the county roads system. Poor road conditions, increased traffic and heavy equipment brought on by the oil boom have contributed to the unsafe conditions.

In March, TxDOT began a new initiative to address these issues state-wide in hopes to provide safety enhancements on roadways across the state’s energy regions. TxDOT says it needs to spend $569 million to improve Eagle Ford roadways, including:

  • Strengthening pavement structures
  • Adding shoulders to protect pavement edges
  • Adding turn lanes at key intersections
  • Constructing passing lanes on Super 2 corridors

Read more about Polk’s gift to Karnes

Sundance Energy Focuses on Eagle Ford

Company to Buy 5050 Acres in McMullen County
Sundance Acquiring More Eagle Ford Assets

Sundance Acquiring More Eagle Ford Assets

Australia’s Sundance Energy is gobbling up more of the Eagle Ford as a major focus of its growth strategy.

Related: Japanese Company Buys Eagle Ford Assets

Sundance Energy Australia Limited announced today that it has entered into an agreement to acquire approximately 5,050 net acres targeting the Eagle Ford in McMullen County, Texas.

The $16.0 million deal is the third venture for Sundance in the Eagle Ford. The company also operates Choke Canyon Reservoir located in McMullen, Live Oak and Atascosa Counties and the Redemption Project located in Dimmit County. Before the announcement of this purchase, Sundance reported on their website that they held ~40,000 net acres in the Eagle Ford.

Chairmen Mike Hannell told shareholders “This prolonged period of depressed commodity prices has tested the resilience of the oil and gas industry. However, the Board and Management of Sundance Energy has not wavered from their overall strategy of building a sustainable growth business and delivering superior shareholder returns in the medium to longer term. A major focus of this strategy is to expand and develop our valuable portfolio of Eagle Ford assets.

The acquisition should be complete by late July and includes the following:

  • 27 gross (9.6 net) wells
  • Total proved reserves of approximately 3.0 mmboe, 1.4 mmboe of which are attributed to producing wells
  • Expected 2016 fourth quarter production of 8,600 – 9,500 boepd

On Tuesday, Tokyo Gas Co. announced that they have closed on their acquisition of ~25% interest in Eagle Ford shale gas assets from the VirTex group. The 34,000 acre assets are located in the Webb and La Salle counties of south Texas.

Read more at SundanceEnergy.com

Japanese Company Buys Eagle Ford Assets

Deal Includes 34,000 Acres in Webb & LaSalle Counties
Japanese Company Buys Eagle Ford Assets

Japanese Company Buys Eagle Ford Assets

Japan’s biggest city gas supplier has purchased a stake in the Eagle Ford Shale.

Related: Japan Eyes Eagle Ford Natural Gas

Tokyo Gas Co. announced on Tuesday that they have closed on their acquisition of ~25% interest in Eagle Ford shale gas assets from the VirTex group.

The 34,000 acre assets are located in the Webb and La Salle counties of south Texas.

According to a Japanese news source, the deal was worth more than 5 billion yen ($48 million), but the company press release indicates the investment will be higher.

“Tokyo Gas estimates that the net capital required to be some 75 million US dollars assuming the natural gas production for Tokyo Gas could average annual 0.20 million tons in the middle term, which depends on the pace of development. The produced gas is to be marketed in the US market.”

In June 2015, a delegation from the Consulate General of Japan toured Texas gas facilities in Freeport, Houston, Moulton and San Antonio. Many suspect that Japanese producers are looking to the Eagle Ford as a potential source of much needed natural gas since a 2011 earthquake wrecked a great deal of the country’s energy infrastructure.

This deal marks the the second time that Tokyo Gas has invested in U.S. shale. In 2013, the company bought another gas stake in the Barnett shale for $485 million.

Read more at Tokyo-Gas.co.jp

Some Eagle Ford Towns Thriving

Gonzales County a Model of Health

Low oil prices and decreased production are not defining some Eagle Ford communities.

Related: UTSA: Eagle Ford Counties Must Diversify

Small towns and communities in the Eagle Ford Shale region of south Texas came alive with the oil boom of 2008 as populations exploded and new wealth flooded in. But as crude prices plunged throughout 2015, revenue streams to dried up and some Eagle Ford communities have fared better than others

Thomas Tunstall, the research director of the UTSA Institute for Economic Development, says that Eagle Ford towns who are now struggling can’t really blame the decline in oil and gas activity for their current economic woes. Back in 2015, Tunstall’s group released a study advising towns that long term planning and economic diversity were key to their survival.

Tunstall points to towns like Gonzales and Cotulla as great examples of towns who have worked to diversify.

“Gonzales has reinvented itself as a tourist destination because it’s the birthplace of the Texas Revolution,” he said. “Cotulla is building sports facilities and working on being designated as a Free Trade Zone to attract truckers.”

The UTSA Institute of Economic Development works to help towns develop strategies for growth and diversity. One of the agency’s initiatives is the Eagle Ford Shale Community Development Program, which trains local leaders how to think strategically. The program recently lost funding and is looking for ways to continue to help struggling Eagle Ford communities trying to make the transition to the new economy of lower crude prices.

Read more at utsa.edu 

Oil & Gas ‘Threat Map’ Pinpoints Millions at Risk in Texas

Eagle Ford Counties at Highest Risk
eagle ford gas threat

Map Showing Threat of Gas Exposure

Eagle Ford counties are at high risk for exposure to dangerous gas and air pollution, according to a newly released ‘threat map’ .

Related: EPA: Tougher Methane Emissions Approved

The new interactive map map highlights schools, hospitals and populations centers in 35 states that are located within 1/2 mile from dangerous natural gas drilling and production activity.

In order to create these maps, three environmental groups – Earthworks, Clean Air Task Force, and FracTracker Alliance -gathered EPA data and models that plot the location of all active oil & gas wells in the United States along with the types of pollutants and the numbers of people at risk.

According to the map’s website, “The map was created to make the public and decision makers aware that this type of air pollution is a ubiquitous health threat that should be addressed with strong government standards.”

The map of Texas details the 398,787 active oil and natural gas wells currently in use in the state with over 2.3 million people within the 1/2 mile radius of risk. The map highlights counties in the Eagle Ford as having the highest risk of exposure to methane and carcinogens including DeWitt, Karnes, McMullen, Frio and Zavala Counties.

Industry leaders are criticizing the map, with one official telling the Business Journal, “It is unfortunate that these organizations breed fear through the reckless dissemination of misinformation.”

In May, the EPA finalized the new rule that sets standards for methane leaks along the natural gas production line. Last summer, President Obama revealed a plan designed to cut greenhouse gas emissions 40 – 45 percent by 2025.

Industry leaders are critical of the ruling say they it is unnecessary and too costly. Oil and gas producers are critically fatigued from months of low crude prices and this new regulation will certainly not be sustainable for some. The EPA estimates that the ruling might cost the industry somewhere between $420 – $530 million.

See the interactive Texas map here

 

MENU