Eagle Ford Shale News

Cabot Plans to Reduce Eagle Ford Wells to One

Second Quarter Earnings Fall Short
Cabot Q2 Report

Cabot Q2 Report

Cabot Oil & Gas reported second quarter earnings that highlight increased production, reduced costs and a focus on natural gas.

Related: Cabot Grabs More Eagle Ford Acreage in Oil Window

Shares of Cabot stock fell 4.4% to $26.39 on Friday after the company reported earnings of 3 cents a share for the second quarter. Revenue fell 42.6% year over year to $306.3 million, below analysts’ estimates of $372.99 million. The company has no plans to change their $900 million capital campaign for 2015.

Cabot’s production increased over the second quarter of 2014 to 128.4 billion cubic feet (5% increase) of natural gas and 1.6 million barrels (68%) of crude oil.

In an earnings call, Dan O. Dinges, Chairman, CEO said the company will rely on discipline to weather the current pricing environment by focusing on improving efficiencies, reducing cost and focusing on natural gas.

Dinges commented that “I’m not as confident as what the oil price is going to do as I am what I see available to us on the natural gas side. So with that being said, we’re focused in natural gas, we’ll remain focused in natural gas. If we have the opportunity to improve our liquids position, it’s going to have to compete with what our view is long term in natural gas.”

Eagle Ford Operations

Cabot’s drilling activity is focused on 89,000 acres in the Eagle Ford Shale, which receives about 40% of the company’s capital allocation. Here are some highlights from the second quarter:

  • Net production was 17,889 barrels of oil equivalent (Boe) per day, an increase of 74 percent over the prior year’s comparable quarter.
  • Cash unit costs were approximately $15.00 per Bbl
  • Decreased our drilling days by about 20% relative to 2014
  • Increased the average number of completions per day by about 20%
  • Upwards of 30% cost reductions across all service lines
  • Currently operating three rigs in the Eagle Ford Shale, with plans to decrease to one rig by the end of 2015
  • Plans to drill approximate 45 net wells in the Eagle Ford Shale in 2015

Read the complete press release at cabotog.com

New Eagle Ford Disposal Well

One Study Links Wells to Earthquakes
New disposal Well for Eagle Ford

New disposal Well for Eagle Ford

A new new Saltwater Disposal well has opened in Waelder Texas that will serve oil & gas hydraulic fracturing operations in the Eagle Ford Shale Play.

Fortress Environmental Services announced last Wendesday that the $9.3 million facility is now open for business and can accept 25,000 barrels of produced saltwater which is pumped to a depth of approximately 8,000 feet.

The new state of the art facility provides an air-conditioned trucker’s lounge/break room, free high-speed Wi-Fi, food, drinks, outside BBQ grill and hot showers.

According to the company’s press release,  All roads to the huge Fortress Environmental Services 10-acre truck stop are paved. The SWD facility provides four pull-through lanes, rapid 8-minute saltwater pump-outs, quick 30-minute truck tank washouts and convenient 10-minute fill-ups from an onsite 50,000 BBL fresh water depot.

Disposal wells are used to inject saltwater waste through high pressure methods deep into storage facilities underground. These wells have been the focus of recent criticism since a new study presented scientific evidence that they lead to earthquakes. The peer reviewed study led by researchers at SMU concluded that earthquakes in the north Texas communities of Azle and Reno were likely triggered by the wastewater disposal methods used by fracking companies.

Related: Texas Earthquakes: The Verdict is Still Out | Eagle Ford Shale Play

Eagle Ford Rigs at 112

Will Iranian Oil Hurt the Eagle Ford?
Eagle Ford Rigs

Eagle Ford Rigs

The Eagle Ford Shale rig count fell slightly this week to 112 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the historic agreement between the U.S. and Iran has analysts and energy executives worried about the impact on the global oil markets and the Eagle Ford Shale specifically.

Read more: Will Iranian Oil Be Bad for Eagle Ford?

The U.S. rig count increased by 19, ending with 876 rigs running by midday Friday.  A total of 216 rigs were targeting natural gas (two less than the previous week) and 659 were targeting oil in the U.S. (21 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)   374 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 clipped to 24 this week and natural gas prices traded at $2.78/mmbtu, an $.10 decrease from the previous week.

The oil rig count rose to 88 as WTI oil prices dropped again to $48.13, a decrease of $2.72. A total of 103 rigs are drilling horizontal wells, zero are drilling directional wells, and nine are vertical rigs. Karnes continues to lead development this week running 20 rigs, with LaSalle (15) and Webb (15) follow 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 20 BURLESON 1 1
LA SALLE 14 15 FAYETTE 1 1
WEBB 15 15 GRIMES 1 1
DE WITT 15 14 LAVACA 1 1
DIMMIT 11 11 MADISON 2 1
MCMULLEN 6 9 ROBERTSON 1 1
GONZALES 6 6 AUSTIN 0 0
ATASCOSA 4 3 COLORADO 0 0
BRAZOS 3 2 GOLIAD 0 0
DUVAL 2 2 LEON 0 0
FRIO 2 2 MAVERICK 0 0
LEE 1 2 MILAM 0 0
LIVE OAK 2 2 WASHINGTON 0 0
ZAVALA 2 2 WILSON 0 0
BEE 2 1 BASTROP 0 0

Eagle Ford Shale News

Fierce Competition in the Eagle Ford

Sanchez Energy Strong in the Eagle Ford

Does Eagle Ford Drilling Add to Ozone?

 

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

Fierce Competition in the Eagle Ford

Small Businesses Face Closure
Valley Energy Service

Valley Energy Service

The recent downturn in the oil and gas industry has hit all of the big players hard. But in the Eagle Ford, some small businesses may soon shut their doors due to the fierce competition that has added to the stress of the crisis.

Related:Weathering the Oil Crisis

Today I am featuring an interview with Robert Platts, owner of Valley Energy Service, a crude oil hauling company that has operated in the Eagle Ford since 2012.

Tell us about your experience in Eagle Ford

You guys ran an article about the trucking shortages in Eagle Ford when everything was going crazy in 2010. I was looking to make a move and I settled on the Eagle Ford area because of the industry boom that was happening. We started working with three out of our five trucks and then slowly went to 24/7, and that’s where we have been for two and a half years now.

It seems, though, everybody read your information and it was pretty competitive by the time we got up and running. We have been hauling for one major marketer since may of 2012. It has been good with them but I’ve had a heck of a time adding new work or clients. It seems there is a “good ol’ boy” network here. It’s all about who you know and that’s tough to break into.

The downturn of last year didn’t affect us until April, but it has gone from 40 loads a day down to six and then three and about 10 days ago, we have had no more loads. It’s a small company, just me, so it is scary because we’ve gone through all of our cash. We have been losing money since April and we have less than 30 days before we have to shut the doors.


There is work out there right now but it seems as though a lot of brokers and midstream companies are getting the work. The brokers are really small trucking companies who will land a contract and hire owner operators to run for them. I don’t know if the companies are ok with it, but all they are doing is subbing out the work and taking 20% off the top.

So it sounds like you were having trouble establishing yourself in the Eagle Ford even before the downturn. 

Well, trucking is new to me. I have not been in this industry my whole life, which has made it hard to break into because, as I said before, it’s all about who you know. But I have been a business owner for 16 years and I have a MBA from Pepperdine University.

We’ve had reputable records here as far as safety goes, that’s a big concern environmentally. We’ve had four spills in four years and two of those were equipment failure and the other two were driver errors; that is a pretty dang good safety record. How we can’t get work when we are hearing from our drivers that there are other companies who are not as safe and reputable as us -yet still have contracts- is a bit dumbfounding.

We have a great reputation, but we are not seeing the right contacts. We have scoured the markets but it is really competitive right now; the only work is for owner operator rates but it is hard to survive on those rates. But right now I am having to, to see if it will work and get us down the road a little farther and hopefully we can make the turnaround in the industry.

What do you think the future holds?

We are right now finalizing a deal with another mid stream  company who has trucks. We are basically having to run for owner operator rates just to keep our trucks busy. With this new work I may be able to limp through and get to that point where things turn around, but I think it will be a lot different. I think there are a lot of companies who are falling by the wayside. These smaller companies, they are moving out of the area and going to West Texas, or wherever they can. We are looking for work in those places as well, it’s just a matter of cash flow for us.

 

de82dfe617c833733b0d8712008cf5b2  For more information about Valley Energy Service, visit their website.

 

Sanchez Energy Strong in the Eagle Ford

Company Volumes at All-Time Highs
Sanchez Q2 Report

Sanchez Q2 Report

Sanchez Energy, focusing its development in the Eagle Ford, stands out in the midst of a sea of suffering oil & gas producers.

The crude price slump has taken its toll on a number of producers who have not been able to adjust enough to stay afloat. Six producers have filed bankruptcy since the first the year; American Eagle Energy, Quicksilver Resources, BPZ Resources, Sabine Oil & Gas, WBH Energy and Walter Energy. Analysts are warning that this is just the tip of the iceberg and many are forecasting bankruptcies will increase later in the year.

Related: Sabine Files Chapter 11

In the midst of the uncertainty, Sanchez is having a really good year. A few weeks after releasing a strong Q1 report, the company’s second quarter earnings show that current volumes are the highest in the company’s history.

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, commented: “During the second quarter 2015, we had success on a number of fronts.Estimated production for the second quarter 2015 averaged approximately 53,920 BOE/D. As a result of operational efficiencies, we are now able to drill and complete wells at a faster pace and at lower costs. Our innovative procurement strategy and continued focus on cost reduction has enabled us to drive capital costs down and deliver average well costs under $4.5 million per well in Catarina during the second quarter.”

Q2 Highlights:

  • Record production of 4,907 thousand barrels of oil equivalent (“MBOE”) during the second quarter 2015 for average production of 53,920 barrels of oil equivalent per day (“BOE/D”)
  • Shorter drilling times and strong production from recent wells put on production at Catarina.
  • Current production is approximately 53,000 BOE/D.
  • The two most recent two-well pads at South-Central Catarina have averaged 24-hour initial production rates between 1,400 and 1,800 BOE/D
  • Increasing its full year 2015 production range to 44,000-48,000 BOE/D.
  • 32 wells required to be drilled before June 30, 2016
  • Decreased well costs from $6.5 million per well to below $4.5 million

In May, Sanchez announced that Gleeson Van Riet has been named Senior Vice President and Chief Financial Officer of the company. Van Riet is replacing Mike Long, who retired on April 30, 2015.

Read more at sanchezenergycorp.com

Does Eagle Ford Drilling Add to Ozone?

Region Exceeds Federal Standards
Does Eagle Ford Drilling Add to Ozone?

Does Eagle Ford Drilling Add to Ozone?

The Alamo Area Council of Governments will hold an executive meeting on Wednesday to discuss ozone levels in South Texas, including what whether drilling in the Eagle Ford Shale plays a role.

Related: EPA Finds Little Risk to Drinking Water from Fracking

The AACOG is responsible for  planning, information, and coordination activities for the region’s air quality that includes some of the top producing counties in the Eagle Ford.

The Council is concerned that the region historically has trouble staying within the federal standards for ozone this time of year and is proposing that private citizens get involved.

Brenda Williams, AACOG’s interim director of natural resources told epressnews.com that “There are a number of things we all can do to help our air quality. We’re basically asking people to limit outside activities that involve use of fuel.”

Some of the suggestions for people to reduce ground-level ozone are:

  • Ride a bus, bicycle or carpool instead of driving
  • Avoid drive-through lanes
  • Take a sack lunch to work or walk to lunch
  • Drive at moderate speeds to limit car exhausts

Meeting Details

July 22nd at 8:30am
AACOG Al J. Notzon III Board Roo
8700 Tesoro Drive Suite 100
San Antonio, TX 78217

Read more at: aacog.com

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