Eagle Ford Shale News

More Job Cuts for Texas

TWC Reports Over 500 Layoffs in the Pipeline
More Texas Jobs Cuts

More Texas Jobs Cuts

News of more Texas job cuts circulated around the news wires yesterday, adding to the strain of the current downturn.

Related: Upcoming Job Fairs in the Eagle Ford

The beginning of 2016 has been less than stellar as the situation in the oil and gas industry continues to deteriorate. Throughout January, crude prices fluctuated wildly dipping to below $30 at one point, while rig counts across the country dropped to 619 last week. Additionally,industry giants Halliburton and Schlumberger announced a new rash of layoffs last month that will cut 14,000 job cuts nationwide.

The news is Texas is not any better with the Texas Workforce Commission reporting new layoffs in the oil and gas industry that will total over 539 jobs.

The TWC is reporting the following job cuts since January 1st:

  • Maersk Drilling: 80 jobs in January
  • Noble Drilling: 120 jobs in March
  • Southwestern Energy Company:  376 jobs in March
  • Tenaris Corp.: 166 jobs in March
  • National Oilwell Varco: 129 jobs in May
  • Quicksilver Resources Inc: 164 jobs in April. The company filed for Chapter 11 bankruptcy in March of 2015 and plans to sell all of its assets while working to restructure its businesses.

After oil prices began their decent last year, it took a little time for the reality of the low oil prices to finally trickle down. But by October 2015, the industry lost an estimated 200,000 jobs with around 60,000 in Texas alone.

Read more at Texas Workforce Commission website

Murphy Oil to Spend $340 in Eagle Ford in 2016

Company's Eagle Ford Assets Stay Resilient
Murphy Oil's 2015 Financials

Murphy Oil’s 2015 Financials

Murphy Oil executives release 2015 numbers showing their Eagle Ford operations have remained resilient and exceed expectations.

Related: Murphy Oil’s Operations in the Eagle Ford

In a press release last week, Murphy Oil announced a net loss of $587.1 million for 2015. The company’s full year volumes were 200,753 boepd in the fourth quarter and 207,903 boepd for full-year 2015.
Eagle Ford Highlights for 2015

The Eagle Ford Shale outperformed company expectations for 2015, with highlights including:

  • Q4 production averaged over 57,000 boepd with 27 operated wells brought online.
  • Full-year 2015 production averaged over 61,200 boepd with 136 operated wells brought online.
  • Eagle Ford Shale had a fourth quarter operating expense of just under $8.50 per BOE. And we expect this to be a reasonable run rate going forward.

For 2016, Murphy is planning 2016 capital expenditures for operations to be $825.0 million with approximately 41 percent will be allocated toward the Eagle Ford Shale. This $340 million will be targeted primarily for drilling and completions in the Eagle Ford. The company also announced plans to drill a second Austin Chalk well in the first quarter of 2016.

When discussing cost-cutting measure, President and CEO, Roger W. Jenkins said “We have a lot of flexibility in the Eagle Ford. And we can go down $100 million there if we want to. And that’s the beauty of these plays is you can slow it down. More difficult in offshore.”

Murphy Oil End of Year 2015 Highlights

  • Produced volumes of 200,753 boepd in the fourth quarter and 207,903 boepd for full-year 2015
  • Spent $2.19 billion capital in 2015, $0.11 billion below guidance of $2.3 billion
  • Recorded total proved reserve replacement of 123 percent in 2015, including 10 percent Malaysian sell-down in first quarter 2015
  • Achieved first production at Dalmatian South #2 in the Gulf of Mexico
  • Delivered 136 Eagle Ford Shale wells during 2015, with 648 operated wells at year-end
  • Reduced lease operating expense per barrel by over 18 percent year-over-year
  • Lowered G&A expense by approximately 16 percent year-over-year

Read more at MurphyOilCorp.com

Eagle Ford Production Up Slightly

Harsh Environment is a "Survival of the Fittest" Environment

Eagle Ford Shale January 2016Oil volumes coming out of the Eagle Ford increased slightly in December, as producers remain engaged in a ‘survival of the fittest’ struggle.

Related: Eagle Ford Counties Lead Production

Analyst group, Platts Bentek, reported this week that oil production in the Eagle Ford went relatively unchanged in December. Though the slight increase of 11,000 barrels a day is statistically irrelevant, it is a welcome relief after months of decline.

December’s average oil production from the Eagle Ford was 1.5 million barrels per day, a 7% decrease year-over-year from 2014.

Analyst Sami Yahya said “The small increase in crude production in the Eagle Ford shale is attributed to a slight resurgence in drilling activity in the region. In December, the number of active rigs in the Eagle Ford reached 80, an increase of five rigs over the previous month. The brief rebound of active rigs is likely due to producers balancing their drilling programs and budgets for the fourth quarter and meeting their goals for wells drilled for the year.”

Looking to the future, the U.S. Energy Information Administration (EIA) predicted that volumes from the seven major shale regions in the U.S. will drop by 116,000 barrels a day in February with the Eagle Ford having the biggest losses, possibly dropping 72,000 barrels a day to 1.15 million.

Producers in the region are feeling the pinch as more and more struggle to stay afloat amidst this unstable environment.

“It is survival of the fittest: the best and most efficient rigs and crews remain standing on the field,” Yahya noted. 

Read more at platts.com

Oilfield Waste is Still Big Business

MIlestone Environmental is Bullish on Expansion
Milestone Adds to its Eagle Ford Portfolio

Milestone Adds to its Eagle Ford Portfolio

One waste management company is adding to their assets in the Eagle Ford region of South Texas and plans for further expansion in 2016.

Related: Natural Gas Will be a Boom for Eagle Ford Companies

In the middle of the downturn, many operators and oil and gas service industries are shrinking, but Milestone Environmental Services, LLC announced this week that it will expand.

Milestone has acquired an oilfield waste facility currently under construction near Smiley, in Gonzalez County, Texas through a newly-formed subsidiary with Intervale Capital.

Houston-based Milestone manages oilfield waste through their state-of-the-art disposal facilities. The company already has an extensive footprint in the Eagle Ford region that includes four injection locations, with two other locations in Katy and Jasper, Texas.

Tuan Tran, Partner at Intervale commented, “The Smiley transaction marks the successful completion of the first stage of Milestone’s geographic expansion.”

Acquisitions have become an attractive growth option for Milestone. Even in the middle of the downturn, the company believes that waste management in the oilfield is underserved. In a separate press release, the company announced plans to fund acquisitions throughout 2016.

President and CEO Gabriel Rio said “We recognize we are pursuing a contrarian strategy to build service capacity during the worst downturn in a couple decades. We want to put capacity in places where the industry needs it. We can do this with good returns today that should be excellent down the road when the market recovers.”

For more information go to milestone-es.com

Abraxas’ Leadership Team Cuts Pay

Abraxas Leadership Team Takes Pay Cut

Abraxas Leadership Team Takes Pay Cut

The leadership team of Abraxas Petroleum is following the example of their CEO by voluntarily cutting their fees in a drastic measure to stay afloat.

Related: Abraxas Chief Slashes Salary

In a Securities and Exchange Commission filing this week, the executive officers of Abraxas announced that they will take a voluntary reduction in salary of 20%, effective February 1, 2016. Also taking cuts will be Abraxas employees who meet certain salary thresholds and the Board of Directors, who have agreed to take a 20% reduction in their fees.

In September, 2015, Abraxas’ president and CEO, Robert Watson voluntarily cut his salary by 20 percent due to stressful market conditions. This was in the middle of a rough quarter where Abraxas posted a net loss of $52.4 million  and the company’s production fell to 552,000 barrels of oil equivalent from 645,000 barrels.

Things changed drastically since 2014, when the company reported its best year on record and compensated Robert Watson over $900,000.

2016 has gotten off to a rough start as the Eagle Ford rig count continued its decline, ending last week with only 74 rigs running across the area. Analysts are predicting that the Eagle Ford will lead the pack for huge losses in early 2016. Read more: 

Abraxas currently operates on ~10,891 net Eagle Ford acres in Atascosa, McMullen, DeWitt and Lavaca counties.

Access the SEC filing here

Eagle Ford Oil Thief Behind Bars

Trio Admits to Stealing from Anadarko and Newfield
Texas oil theft

Texas Lawmakers Go After Oil Theft

One Eagle Ford oil thief is now behind bars and two of his buddies are soon to follow.

Related: Oil Theft Climbs in the Eagle Ford

Last Wednesday, United States District Judge Alia Moses sentenced Juan Martin Bernal of Eagle Pass to 21 months in federal prison for his role in stealing $1.4 million in Eagle Ford Shale oil. Bernal was one of three defendants who pleaded guilty to one count of theft from an interstate shipment.

As part of his sentence, Bernal will also be required to pay a monetary judgment of $150,000 and will be placed on supervised release for a period of three years after completing his prison term.

Last year, Bernal and two co-defendants, 26-year-old Carlos Samuel Pena of Del Rio and 38-year-old Victor Manuel Guerra, Jr., the owner of Las Lomas Vacuum Services and AVG Vacuum Services in Laredo, pleaded guilty to one count of theft from an interstate shipment.

Bernal and two co-defendants–26–year-old Carlos Samuel Pena of Del Rio and 38-year-old Victor Manuel Guerra, Jr., admitted that between January 2011 and August 2014, they devised a scheme to steal oil from Newfield Exploration Company, and Anadarko Petroleum Corporation.

Guerra owned Las Lomas Vacuum Services and AVG Vacuum Services in Laredo and the trio used his wastewater removal trucks to transport the stolen oil. The oil was transported to Guerra’s property where he would sell the stolen product to third-party buyers who paid for the oil by wire transfer.

Guerra and Pena face up to ten years in federal prison. Guerra’s sentencing is April 25 and Pena’s is June 20. Both are scheduled to appear in Del Rio before Moses.

The case relied on an army of local, state and federal officials who were involved in the investigation including the FBI, the IRS Service Criminal Investigation, the Texas Attorney General’s Special Investigations Unit, the Bexar County District Attorney’s Office, the Texas Department of Public Safety, the Texas Rangers, the Dimmit County Sheriff’s Office and the Texas Railroad Commission.

In December,Texas lawmakers met in Austin to discuss the growing problem of oil theft in the Texas oil patch and to craft a bill that would increase the penalties for the crime. This is likely to be one of the top energy issues for the next legislative session in 2017, as lawmakers aim to send Abbott an anti-theft bill he can stomach.

House Speaker Joe Straus asked lawmakers to “Examine whether current statutes are adequate for the successful prosecution of oilfield theft. Consider the potential economic impact of increasing penalties for oil and gas theft and make recommendations establishing an effective law enforcement response.”  

Read more about this case at www.justice.gov