Oil Exports to Foreign Buyers Begins

Condensate Exports to Foreign Buyers from Eagle Ford-Focused Companies Could Begin Soon - Wall Street Journal
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Oil Well Pump Jack

After nearly four decades, the Obama administration has opened the door for U.S. exports of unrefined American oil, according to  The Wall Street Journal (WSJ).

The decision was approved in a private ruling by the Commerce Department’s Bureau of Industry and Security, and will for now allow only two companies, Pioneer Natural Resources Co. and Enterprise Product Partners LP, to export Eagle Ford condensate after it has been minimally processed. Shipments, which are likely to be small, could begin as early as August, the paper noted.

Condensate, which is also referred to as ultra-light oil, and light crude oil make up a majority of production in the Eagle Ford Shale. As a general rule, lighter crudes and condensate are easier to process into refined products.

Light-Sweet Crude/Condensate Production Booming in the Eagle Ford

With production booming in the Eagle Ford, there has been chatter for some time about the easing of the export ban, as the supply of light sweet crude/condensate has begun to saturate the market and drive prices of Eagle Ford crude down. By 2020, consultancy Wood Mackenzie estimates crude and condensate production coming out of the Eagle Ford will reach 2-million b/d, which is nearly double current production.

WSJ reports the private rulings by the Commerce Department define some ultralight oil as fuel after it has been minimally processed, making the oil eligible for sale outside of the U.S. This new ruling flirts with current rules put into place after the Arab oil embargo in the 70s, which allow U.S. companies to export refined products such as gasoline, but not unrefined products (i.e. crude and condensate), with certain limitations and special licensing provisions.

Read more at wsj.com

Eagle Ford Spending Could Reach $30 Billion in 2014

Investment Will Propel Production Well Past 1 Million b/d
Eagle Ford Oil Production

Eagle Ford Oil Production | Click to Enlarge

Eagle Ford spending could stretch to new heights this year.

Eagle Ford oil production will surpass 1 million b/d early this year (combined oil and condensate production already has) and strong growth won’t stop there.

GlobalData expects development spending could reach as high as $30 billion. If that happens, Eagle Ford oil production won’t just reach 1 million b/d, it’ll blow right past it. Other research organizations estimate spending somewhere in the $20-25 billion range.

If spending ends up closer to $20 billion, it will tie directly to cost savings the industry is capturing across the board and not necessarily due to less activity. [Read more…]

TX RRC Data – Eagle Ford Production Surging Ahead

Preliminary figures will be revised up and oil production could be by as much as 30,000 b/d higher

Oil Drum ImageTexas Railroad Commission data from July shows the Eagle Ford produced approximately 310,000 b/d of crude oil. Unless the industry has gotten more timely at reporting figures, that number is likely conservative. If recent trends prove true, July’s figures could be revised upwards by as much as 10%, which puts crude oil production near 350,000 b/d today.

Railroad Commission data also shows the play produced over 50,000 b/d of condensate and 1.21 Bcf/d of natural gas. As pipeline and gathering systems expand, natural gas production will show itself to have considerable upside from where it stands now. Many wells are brought to production before natural gas pipelines are tied in, but that number is decreasing as midstream companies catch up to the operators.

Texas Oil Production Poised to Set New Highs [Read more…]