Eagle Ford Shale News

Clayton Williams May Reduce Eagle Ford Drilling Program – 2015

Q3 2014 Eagle Ford Production - 2,900 boe/d
Clayton Williams Eagle Ford Operations Map

Clayton Williams Eagle Ford Operations Map | Click to Enlarge

With the recent dip in oil prices, Clayton Williams indicated it may be scaling back drilling plans in the Eagle Ford in 2015.

Currently, the company is running a six rig program across its core areas, with three in the Eagle Ford and three in the Delaware Basin, and plans to continue drilling at this pace for the remainder of 2014. Based on this level of activity, the company expects combined oil and gas production for the fourth quarter of 2014 to average between 16,600 and 17,000 boe/d portfolio-wide.

By comparison, Clayton Williams estimates the same number of rigs in the Eagle Ford and Delaware Basin, would yield an average between 18,800 and 19,400 boe/d portfolio-wide in 2015. However, officials indicated in the company’s third quarter of 2014 report that a two rig drilling program may be considered in each area, which would reduce production by 1,300 boe/d.

In the third quarter of 2014, the Eagle Ford alone averaged approximately 2,900 boe/d, with a 94% oil cut.

Clayton Williams’ Eagle Ford Operations Update – Q3 2014

Currently, Clayton Williams has 22 horizontal Eagle Ford wells on its legacy Austin Chalk acreage block in Burleson, Robertson and Lee Counties, that have been on production for 30 days or more. The peak 30-day production rate for these wells has averaged 518 boe/d, with a 96% oil cut. Six additional wells have been on production for less than 30 days or are currently in various stages of completion, and three wells are currently being drilled. Typical drilling and completion costs in this area range from $5-million to $6-million per well, according to company officials.

Clayton Williams Testing Sequential Fracturing Operations and Well Densities

Clayton Williams is currently testing sequential fracturing operations and increased well densities, primarily in Burleson County, to help determine optimal spacing and fracturing design for future Eagle Ford development. Company officials say two adjacent wells were sequentially fractured with good early results, and there are plans for the fourth quarter to sequentially fracture a group of three adjacent wells.

Read more at ClaytonWilliams.com

Eagle Ford Shale Rig Count Stays Flat at 269

Bloomberg: Reliance Industries Seeks Buyer for its Interest in Eagle Ford Joint Venture
Pioneer Natural Resources' Production Chart

Pioneer Natural Resources’ Eagle Ford Production Chart | Click to Enlarge

The Eagle Ford Shale rig count stayed flat at 269 rigs running across our coverage area by the end of last week.

In recent Eagle Ford news, India’s Reliance Industries is looking for a buyer for its interest in a three-way joint Eagle Ford joint venture, according to Bloomberg, which cited “people familiar with the matter.” The other players in the JV are Irving, Texas-based Pioneer Natural Resources Co. and a division of Mexico’s Alfa SAB de CV – Newpek, LLC.

Read more: Reliance Industries Seeks Buyer for Eagle Ford JV Interest

The U.S. rig count decreased by 12 to 1,918 rigs running by the end of last week. A total of 328 rigs were targeting natural gas (eight more than the previous week) and 1,590 were targeting oil in the U.S. (19 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).  898 or ~48% of rigs active in the U.S. were running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (209 rigs). 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

The natural gas rig count increased by three to 19 rigs running by the end of last week. Average rig counts for natural gas production in 2012 were around 80 and then dropped to around 40 in 2013. Natural gas prices decreased by ~$.10 from the previous week to $3.77/mmbtu on Friday afternoon.

The oil rig count decreased by three to 250 rigs running by the end of last week. WTI oil prices decreased by less than $1.00 from the previous week, trading at $83.15/bbl on Friday afternoon. Eagle Ford light crude traded at $79.25/bbl on Oct. 16th.

A total of 242 rigs are drilling horizontal wells, 12 rigs are drilling directional wells, and 15 rigs are drilling vertical wells. Karnes, La Salle, Dimmit, and McMullen each have at minimum 26 rigs running. Karnes County has the highest rig count this week at 36. See the full list below in the Eagle Ford Shale Drilling by County below

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts – Every other Weekday or Weekly Email Alerts

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
KARNES 38 36 FAYETTE 4 3
DIMMIT 33 33 LEON 4 3
LA SALLE 26 25 ZAVALA 4 3
MCMULLEN 26 24 MAVERICK 1 2
DE WITT 21 21 BEE 1 1
WEBB 19 18 COLORADO 1 1
GONZALES 15 15 GRIMES 1 1
MADISON 14 14 WILSON 1 1
ATASCOSA 12 13 AUSTIN 0 0
BRAZOS 13 13 DUVAL 0 0
LAVACA 12 11 GOLIAD 0 0
BURLESON 6 10 MILAM 0 0
FRIO 7 9 ROBERTSON 1 0
LIVE OAK 7 8 WASHINGTON 0 0
LEE 2 4 BASTROP 0 0

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.

EIA: Eagle Ford Shale Expected to Hit 1.614-Million b/d in Nov. 2014

New-Well Oil Production Per Rig Increasing from 532 b/d in October to 540 b/d in November
EIA Eagle Ford Production Chart - Nov. 2014

EIA Eagle Ford Production Chart – Nov. 2014

The Eagle Ford Shale is expected to produce 1.614-million b/d of oil in November, which is a 29% increase from the same time last year, according to the Energy Information Administration’s (EIA) Drilling Productivity Report. October’s total production from the play is expected to be 1.579-million b/d.

Despite lower crude prices, EIA data shows gains in production across all major U.S. shale fields. According to the International Energy Agency (IEA), only 4% of U.S. shale production needs prices above $80 for drillers to break even. On October 17th, WTI was trading at ~$82.

Eagle Ford operators continue the trend to be more efficient. EIA data shows new-well oil production per rig increasing from 532 b/d in October to 540 b/d in November.

Gains in the Bakken and Permian Basin

The Bakken Shale in North Dakota and Montana is expected to produce 1.193-million b/d of oil in November, up 22% from the same time last year, according to the EIA. October’s total production from the play is expected to be 1.164-million b/d.

Production in West Texas’ Permian Basin in October is expected to be 7.765-million b/d, and increase ~2% to 1,807-million b/d in November.

Texas and North Dakota, which encompasses the most active area of the Bakken, currently make up almost half of the nation’s crude oil supply.

Reliance Industries Seeks Buyer for Eagle Ford JV Interest

Bloomberg: JV Valued at ~$4-Billion
Pioneer Natural Resources' Production Chart

Pioneer Natural Resources’ Eagle Ford Production Chart | Click to Enlarge

India’s Reliance Industries is looking for a buyer for its interest in a three-way joint Eagle Ford joint venture, according to Bloomberg, which cited “people familiar with the matter.” The other players in the JV are Irving, Texas-based Pioneer Natural Resources Co. and a division of Mexico’s Alfa SAB de CV – Newpek, LLC.

Mumbai-based Reliance entered the Eagle Ford in 2010 for $1.15-billion. The deal included a 45% interest in Pioneer’s Eagle Ford acreage. Currently, Pioneer has ~230,000 gross acres across the play, and a 46% interest in the JV. Newpek, LLC has a 9% interest.

Read more: Reliance – Pioneer – Newpek Joint Venture

The assets included in the JV are in the heart of the Eagle Ford’s condensate window. In June, Pioneer garnered headlines when it received permission from the U.S. Commerce Department (U.S. DoC) to export minimally processed condensate to foreign buyers. With the green light from the U.S. DoC, the assets have become even more attractive and more valuable. Total assets are valued at ~$4 billion, according to Bloomberg’s sources.

Read more: Pioneer CEO Confirms Condensate Exports to Europe 

Earlier this year, Pioneer tabled a deal to sell its interest in the Eagle Ford JV, but will likely consider another offer if the price is right. Newpek, LLC is also reportedly looking for a buyer, according to Bloomberg.

In the second quarter, Pioneer posted record net production in the Eagle Ford of 47 mboe/d. Pioneer, which is the operator for the assets, expects to place 125 wells online in 2014.

Eagle Ford Shale Rig Count Increases by Two to 269

Rare Lizard Has Potential to Disrupt Eagle Ford Development
Spot Tailed Earless Lizard

Spot Tailed Earless Lizard

The Eagle Ford Shale rig count increased by two to 269 rigs running across our coverage area by the end of last week.

In recent Eagle Ford news, a rare lizard, once spread across portions of the Eagle Ford region, has largely vanished, according to the San Antonio Express News. And now the species has the potential to disrupt oil & gas development in the region, if it is designated as threatened or endangered by the U.S. Fish & Wildlife Service (USFW), under the endangered species act (ESA).

Read more: Could a Lizard Disrupt Eagle Ford Development

The U.S. rig count increased by eight to 1,930 rigs running by the end of last week. A total of 320 rigs were targeting natural gas (ten less than the previous week) and 1,609 were targeting oil in the U.S. (18 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).  896 or ~48% of rigs active in the U.S. were running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (210 rigs). 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

The natural gas rig count increased stayed flat at 16 rigs running by the end of last week. Average rig counts for natural gas production in 2012 were around 80 and then dropped to around 40 in 2013. Natural gas prices decreased by ~$.15 from the previous week to $3.86/mmbtu on Friday afternoon.

The oil rig count increased by two to 253 rigs running by the end of last week. WTI oil prices decreased by more than $5.00 from the previous week, trading at $84.72/bbl on Friday afternoon. Eagle Ford light crude traded at $82.25/bbl on Oct. 9th.

A total of 243 rigs are drilling horizontal wells, ten rigs are drilling directional wells, and 16 rigs are drilling vertical wells. Karnes, La Salle, Dimmit, and McMullen each have at minimum 25 rigs running. Karnes County has the highest rig count this week at 38. See the full list below in the Eagle Ford Shale Drilling by County below

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts – Daily or Weekly Email Alerts

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
KARNES 37 37 LEON 4 4
DIMMIT 28 29 ZAVALA 5 4
LA SALLE 26 28 LEE 4 2
MCMULLEN 23 24 WILSON 3 2
DE WITT 21 22 BEE 1 1
WEBB 22 22 COLORADO 1 1
GONZALES 15 15 GRIMES 3 1
MADISON 13 15 MAVERICK 0 1
BRAZOS 11 13 ROBERTSON 1 1
ATASCOSA 13 11 AUSTIN 0 0
LAVACA 12 11 DUVAL 0 0
FRIO 6 7 GOLIAD 1 0
LIVE OAK 7 7 MILAM 0 0
BURLESON 6 5 WASHINGTON 1 0
FAYETTE 4 4 BASTROP 0 0

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.

PetroQuest Sells Eagle Ford Assets – $9.7 Million

Purchase Price Nearly 50% More Than PV-10 of $6.6 Million
PetroQuest, Inc. Operations Map

PetroQuest, Inc. Operations Map | Click to Enlarge

PetroQuest Energy, Inc. (NYSE: PQ) announced the completion of its Eagle Ford assets sale at the end of September, 2014. The Houston, TX-based company netted $9.7 million from the deal.

PetroQuest estimates the operating cash flow generated from its Eagle Ford assets during the first six months of 2014 totaled ~$2-million on average with daily production of ~195 boe/d. At the end of June, the company estimated proven natural gas reserves associated with the assets totaled approximately 2.1 Bcfe, with an estimated discounted net cash flow (PV-10*) of $6.6-million.

Overall, this sale a good deal for PetroQuest, considering the purchase price was nearly 50% higher than PV-10. The company did not disclose the buyer for the assets.

PetroQuest will likely re-invest the proceeds from this sale in another Texas play. The company’s core focus areas are in the Woodford, Cotton Valley and the Gulf Coast.

PV-10: present value of estimated future oil and gas revenues, net of estimated direct expenses, discounted at an annual discount rate of 10%.

Read more at petroquest.com

Could a Lizard Disrupt Eagle Ford Development?

USFW Considering Rare South Texas Lizard for Protection Under the ESA
Spot Tailed Earless Lizard

Spot Tailed Earless Lizard

Have you ever heard of the spot-tailed earless lizard? Don’t worry – we hadn’t either.

The rare lizard, once spread across portions of the Eagle Ford region, has largely vanished, the San Antonio Express News reported in early October of 2014. And now the species has the potential to disprupt oil & gas development in the region, if it is designated as threatened or endangered by the U.S. Fish & Wildlife Service (USFW), under the endangered species act (ESA).

Endangered and Threatened Species in Texas

Industry and regulators fear government intrusion via the ESA could ultimately hurt Texas’ lucrative oil & gas industry. And those fears are not unwarranted – in 2012, a $29-million road construction project in San Antonio, TX, was stopped, when it was discovered the endangered Bracken Bat Cave Meshweaver spider’s cave habitat would be disrupted. Construction is slated to begin again in 2015, but with a new price tag of $44-million to accommodate for the spider.

In late March of 2014, the USFW listed the lesser praire chicken as threatened under the ESA. The species is concentrated in the western portion of the state and in the Panhandle, which presents more of a threat to oil & gas operations in the Permian Basin, than the Eagle Ford region. However, several species, including the spot-tailed earless lizard, have the potential to impact the Eagle Ford.

Read more: The Lesser Praire Chicken’s Impact on Texas Oil

Environmental Group Pushing for Lizard’s Protection Under ESA

Santa Fe, NM-based WildEarth Guardians, an environmental group, submitted a petition in 2010 to place the spot-tailed earless lizard under the endangered species act. In their petition, the group says the species may already be extinct in the wild. In 2011, USFW said listing the species as endangered or threatened may be warranted, but that doesn’t mean the lizard will ultimately receive either of those designations. The process can take years for a species to receive a designation from the USFW.

The Texas Railroad Commission (RRC), which regulates the oil & gas industry in Texas, has taken a strong stance against the federal government and the ESA.

In 2012, Commissioner David Porter, said, “we must not allow the Obama administration to use the Endangered Species Act as a weapon against the oil and gas industry.”

If or when the lizard receives an endangered or threatened designation from the USFW, oil & gas development would be impacted in the Eagle Ford. With the play hitting 1.5 million b/d in September of 2014, this has the potential to be a notable issue for South Texas’ burgeoning oil and gas economy.

Eagle Ford Shale Rig Count Decreases by One to 267

Atlas Resource Partners Enters Eagle Ford in $225 Million Deal
Atascosa County Eagle Ford Shale Map

Atascosa County, TX

The Eagle Ford Shale rig count decreased by one to 267 rigs running across our coverage area by the end of last week.

In recent news,Pittsburgh-based Atlas Resource Partners (ARP) is entering the Eagle Ford in a $225-million deal. ARP will acquire 22 producing wells and 19 undeveloped locations containing estimated net reserves of 12-million BOE, according to company officials. The seller was not disclosed.

Read more: Atlas Resource Partners Enters Eagle Ford – $225 Million Deal

The U.S. rig count decreased by nine to 1,922 rigs running by the end of last week. A total of 330 rigs were targeting natural gas (eight less than the previous week) and 1,591 were targeting oil in the U.S. (1 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).  895 or ~48% of rigs active in the U.S. were running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (210 rigs). 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

The natural gas rig count increased by one to 16 rigs running by the end of last week. Average rig counts for natural gas production in 2012 were around 80 and then dropped to around 40 in 2013. Natural gas prices stayed relatively flat from the previous week at $4.02/mmbtu on Friday afternoon.

The oil rig count decreased by two to 251 rigs running by the end of last week. WTI oil prices stayed relatively flat from the previous week, trading at $90.15/bbl on Friday afternoon. Eagle Ford light crude traded at $87.50/bbl on Oct. 2nd.

A total of 244 rigs are drilling horizontal wells, eight rigs are drilling directional wells, and 15 rigs are drilling vertical wells. Karnes, La Salle, and Dimmit each have at minimum 28 rigs running. Karnes County has the highest rig count this week at 37. See the full list below in the Eagle Ford Shale Drilling by County below

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts – Daily or Weekly Email Alerts

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
KARNES 37 37 LEON 4 4
DIMMIT 28 29 ZAVALA 5 4
LA SALLE 26 28 LEE 4 2
MCMULLEN 23 24 WILSON 3 2
DE WITT 21 22 BEE 1 1
WEBB 22 22 COLORADO 1 1
GONZALES 15 15 GRIMES 3 1
MADISON 13 15 MAVERICK 0 1
BRAZOS 11 13 ROBERTSON 1 1
ATASCOSA 13 11 AUSTIN 0 0
LAVACA 12 11 DUVAL 0 0
FRIO 6 7 GOLIAD 1 0
LIVE OAK 7 7 MILAM 0 0
BURLESON 6 5 WASHINGTON 1 0
FAYETTE 4 4 BASTROP 0 0

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.

Juneau Energy Adds 10,264 Acres in East Texas Eagle Ford

Company Holds 15,000 Net Non-Contiguous Acres in the Eagle Ford
East Texas Eagle Ford Counties in which Juneau Energy is Active

East Texas Eagle Ford Counties in which Juneau Energy is Active

Juneau Energy, LLC, a subsidiary of Leucadia National Corporation, announced the acquisition of oil and gas leases in the emerging East Texas Eagle Ford Shale, consisting of approximately 10,264 net acres primarily in Brazos and Burleson counties. Neither the buyer, nor the purchase price for the acreage were disclosed in a company press release from mid September of this year.

Juneau CEO Brad Juneau, said, “this transaction, along with the existing acreage provides a contiguous block of acreage in excess of 13,500 net acres and allows Juneau Energy to immediately begin and control the development process of these assets.”

With other non-contiguous acreage, the company holds in excess of 15,000 net acres in the Eagle Ford Shale play. The acquisition closed on September 17, 2014.

Juneau is a privately held acquisition and development company, with assets in East Texas and Oklahoma.

Other Recent East Texas Eagle Ford Developments

In July, Denver-based Hawkwood Energy, announced its entrance into the Eagle Ford with the acquisition of producing and non-producing assets in East Texas.

Read more: Hawkwood Energy Acquires East Texas Eagle Ford Acreage

And in June, Comstock Resources Inc. announced the results of its first well drilled in its East Texas Eagle Ford Shale acreage in Burleson County, TX.

The Henry A #1H test well had a peak 24-hour average production rate of ~1,267 boe/d, with a ~80% oil cut. The well was drilled to a vertical depth of 9,514 feet, and had a 6,841 foot completed lateral which was stimulated with 17 stages and 10.2 million pounds of proppant.

Read more: Comstock Reveals Results from First East Texas Eagle Ford Well

Read more at juneauenergy.com

Atlas Resource Partners Enters Eagle Ford – $225 Million Deal

Deal Includes 22 Producing Wells in Atascosa County, TX
Atascosa County Eagle Ford Shale Map

Atascosa County, TX

Pittsburgh-based Atlas Resource Partners (ARP) is entering the Eagle Ford in a $225-million deal. ARP will acquire 22 producing wells and 19 undeveloped locations containing estimated net reserves of 12-million BOE, according to company officials. The seller was not disclosed.

The producing wells are all located in Atascosa County, TX, which is the heart of the Eagle Ford oil window. The oil cut from these wells is 87%, with 7% NGLs and 6% natural gas. ARP officials did not indicate the exact county or counties for the undeveloped drilling locations.

The transaction, which has an effective date of July 1, 2014,  is expected to close some time in the fourth-quarter. The company will pay $200-million of the purchase price at closing.

ARP CEO Edward E. Cohen, said, “we expect this transaction to immediately enhance ARP’s cash flow, distribution coverage and credit metrics, providing additional visibility and growth.”

In connection with the acquisition, Atlas Energy, L.P.’s (ATLS) E&P development subsidiary will purchase eight wells that have already been drilled, but are uncompleted, in the play. The $115-million purchase also includes 53 undeveloped Eagle Ford locations.

ARP is an exploration & production master limited partnership which owns an interest in over 14,000 producing natural gas and oil wells, located primarily in Appalachia, the Barnett Shale (TX), the Mississippi Lime (OK), the Raton Basin (NM), Black Warrior Basin (AL) and the oil-rich Rangely Field (CO).

Read more at atlasresourcepartners.com

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