Enlink Midstream Aquires Pipeline Company

First of Many Transactions with Devon
Victoria Express Pipeline

Victoria Express Pipeline |Click to Enlarge

Enlink Midstream Partners announced Monday it will acquire Victoria Express Pipeline (VEX) from Devon, giving the new company a “strategic footprint” into the Eagle Ford Shale play.

Read more about the VEX

The deal is estimated to be worth $220 million and includes the following assets:

  • A 56-mile multi-grade crude oil pipeline
  • Facilities at the Port of Victoria with an eight-bay truck unloading terminal and 200,000 barrels of above ground storage
  • Facilities near the origin of the pipeline (under construction) including an eight-bay truck unloading terminal and 160,000 barrels of above-ground storage
  • A condensate pipeline from the Eagle Ford Shale to Victoria

The transaction, expected to close on or about April 1st, is the first of many between Devon and Enlink (formerly Crosstex), who announced a partnership in 2014.

Read more about Devon in the Eagle Ford

Barry E. Davis, EnLink President and Chief Executive Officer. “This transaction marks the first dropdown from Devon to EnLink, and we expect transactions like this to play a significant role in our future growth. These assets will give EnLink a tremendous growth platform in the Eagle Ford Shale. We look forward to providing high-quality midstream services to producers and marketers in the Eagle Ford area.”

Read more at enlink.com

Devon Energy Reports Exceptional Q4

Company Slashes 2015 Spending by 20%
Devon Energy in the Eagle Ford

Devon Energy in the Eagle Ford

In its quarterly report, Devon Energy announced it finished an “outstanding year” as it rebounded from a $20 million net loss in 2013 to end 2014 with net earnings of $1.6 billion.

Devon’s fourth-quarter total production rose 20% to 239,000 barrels per day, which represents a 48% increase from 2013.

The report credits the Eagle Ford’s prolific wells for these record numbers. Devon Energy is active in over 82,000 acres in DeWitt and Lavaca counties in Texas.

Related: Devon Banking on High Returns from Eagle Ford Investment

“Devon delivered another exceptional performance in the fourth quarter, rounding out an outstanding year for the company, including a significant repositioning of the portfolio,” said John Richels, president and CEO.”

Looking to 2015, Devon has significantly reduced its capital budget for next year by 20% to $4.96 billion. The company plans to slash its spending in all areas except the Eagle Ford, including a 21% cut in exploration and production. The company predicts oil production will increase 20% to 25% in 2015 and they plan to operate on 13 rigs for 2015, as compared with more than 20 rigs last year.

Richels further comments that, “With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015.” 

In other Devon news, Chief Executive John Richels announced in December his plans to retire at the end of July. It is expected that their Chief Operating Officer, Dave Hager, will be named as his successor. Read more here.

Get the full report at devonenergy.com

Devon Subsidiary Constructing New Eagle Ford Oil Pipeline

Ultimate Capacity of 100,000 b/d
Victoria Express Pipeline

Victoria Express Pipeline |Click to Enlarge

Victoria Express Pipeline LLC (VEX), a subsidiary of Devon Energy, is constructing a 56.4 mile long pipeline from the Blackhawk central delivery point in DeWitt County, Texas to the inlet of Devon Gas Services’s terminal at the Port of Victoria. The 12-inch pipeline is expected to come online July 1, 2014, with an ultimate capacity of 100,000 b/d.

In late 2013, Devon Energy agreed to pay GeoSouthern $6-billion for 82,000 net acres in the Eagle Ford Shale play. In the first quarter of 2014, the company said its net daily production in the Eagle Ford was 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Eagle Ford producers need to continuously think about how they will get their production to the refining market as activity in the play continues to grow. Wood Mackenzie recently released information stating production from the Eagle Ford Shale will reach 2-million b/d by 2020.

Read more: Devon Banking on High Returns from Eagle Ford Investment

VEX is currently conducting a binding open season to attract companies for long term commitments in exchange for access to priority capacity. The open season will end on June 19, 2014.

VEX is also constructing an additional receipt point eight miles north of Victoria in Victoria County, Texas. The company may add an additional destination point at Point Comfort in Calhoun County, Texas.

Devon Banking on High Returns from Eagle Ford Investment

Lavaca County Acreage Performing Better than Expected According to Devon
Devon Energy Eagle Ford Acreage Map

Devon Energy Eagle Ford Acreage Map – 82,000 net acres | Click to Enlarge

After closing its $6 billion transaction with GeoSouthern for 82,000 net Eagle Ford acres at the end of February 2o14, Devon says its current net daily production in the play is 64,000 boe/d. In the second quarter, the company anticipates it will average between 65,000 and 70,000 boe/d, with more than 100,000 boe/d by next year.

Devon is banking on high returns from its hefty Eagle Ford investment, and so far, the company appears to be confident it will achieve a lucrative pay off.

Read moreDevon Energy Acquires Eagle Ford Assets from GeoSouthern for $6 Billion

At the UBS Oil & Gas Conference at the end of May of 2014, the company’s COO, David Hager, revealed the Lavaca County acreage is performing better than expected. Currently, the company has 300 total preliminary locations targeted in the county. In DeWitt County, the company has 900 preliminary locations targeted.

Hager, said, “when we acquired [the Eagle Ford acreage], we placed over 90% of the value from an internal standpoint on DeWitt County. We didn’t put as much value on Lavaca County initially []. What we’re finding is the results aren’t quite as good as DeWitt County, but there are a lot better than we originally anticipated.”

Recently, another Eagle Ford operator, Penn Virginia, revealed strong results from two of its Upper Eagle Ford test wells in Lavaca County. One of the wells had an initial production (IP) rate of 2,165 boe/d. Company officials for Penn Virginia said in a quarterly update that the two wells have the highest wellhead flowing pressures the company has seen to date in the Eagle Ford, with GORs (gas-oil-ratios) of 5,000 – 6,000 standard cubic feet per barrel.

Read morePenn Virginia Seeks to Expand Eagle Ford Position

In 2014, Devon will drill approximately 230 wells across its Eagle Ford acreage position. About 200 of those wells are slated to be drilled in DeWitt County under a 50/50 partnership with BHP Billiton. The other 30 wells are to be drilled in Lavaca County, where Devon has a 100% working interest in the majority of the acreage. Also in 2014, look for Devon to drill some Upper Eagle Ford wells.

Read more at Devon.com

Devon Energy Sells Canadian Assets to Pay Down Eagle Ford Debt

Officials Say Devon Will Divest Non-Core US Assets by The End of the Year
Devon Energy Core & Emerging Asset Map

Devon Energy Core & Emerging Asset Map

Devon Energy completed the sale of its Canadian conventional assets to Canadian Natural Resources for $2.7 billion after taxes.

The company will use the money to pay down debt acquired from a $6 billion purchase of GeoSouthern’s Eagle Ford assets, which was completed on February 28th.

Read more: Devon Acquires Eagle Ford Assets from GeoSouthern for $6 Billion

Devon considers its’ Eagle Ford Shale acreage as core to its portfolio, and plans on divesting its non-core US assets by the end of the year. Devon’s other US core areas are in the Barnett Shale, Anadarko Basin and Permian Basin. The Mississippian-Woodford and the Powder River and Wind River Basins in the Rockies are emerging assets in the company’s portfolio.

[Read more…]

Devon Energy Eagle Ford Spending $1.1 Billion in 2014

Devon Estimates Eagle Ford Average Net Production of 70,000 - 80,000 boe/d Through October, 2014
Devon Energy Eagle Ford Acreage Map

Devon Energy Eagle Ford Acreage Map – 82,000 net acres | Click to Enlarge

Devon Energy plans on investing $1.1 billion in the Eagle Ford in 2014 and will drill more than 200 wells. The company estimates average net production through October, 2014, of 70,000 – 80,000 boe/d in the play.

At the end of February 2014, the company closed on its $6 billion Eagle Ford acreage acquisition from GeoSouthern. The deal included 82,000 net acres in DeWitt and Lavaca Counties, and makes Devon a significant player in the Eagle Ford Shale.

Read more: Devon Energy Acquires Eagle Ford Assets From GeoSouthern for $6 Billion

[Read more…]

MENU