Karnes County Earthquake Sets Record in Eagle Ford Area

A 4.8 magnitude Karnes County earthquake rattled doors Thursday morning. (Atascosa County is now reported as the epicenter) You can view USGS data Here. It isn’t the first earthquake in the area, but was larger than previous quakes. It was just 2008, which is before Eagle Ford Shale development began, when a 3.7 magnitude quake struck the area and 1993 when the largest I can remember hit the area (4.3 mag). Yesterday’s disturbance is likely the largest on record for the area, but one of a dozen or so since 1990. Tremors were felt as far as San Antonio.

Oil & gas drilling activity has not been linked to this event. If drilling directly led to earthquakes, West Texas would have fallen off the map a long time ago. It just so happens that oil & gas are present in areas of high tectonic activity. The Los Angeles basin is one of the most active areas in the world and also boast the most hydrocarbons per cubic ft of rock in the world.

There have been concerns that deep disposal wells where fluids are being injected into the ground could be tied to small earthquakes. It won’t be clear for a long time if that might be the case here. Test are ongoing in more established shale plays in North Texas’ Barnett Shale and in Arkansas’ Fayetteville Shale. [Read more…]

BHP – Petrohawk Deal Brings Australia to the Eagle Ford

Petrohawk’s Eagle Ford position is paying off in a big way.  The company has received a bid to be acquired by BHP Billiton for a 65% premium over the prior days stock price. Petrohawk’s leading position in the Eagle Ford is likely a primary driver behind the acquisition. The company is strategically positioned in two of the hottest areas of the Eagle Ford with its Black Hawk and Hawkville field positions. The company also has a sizeable oil position at the Red Hawk Field in the Eagle Ford Shale Oil window that has not provided the economic results needed to compete for capital with Petrohawks other assets. Expect the Red Hawk Field to get more attention now that the operator has much deeper pockets.

Overall, drilling rates across Petrohawks asset base will likely increase as BHP looks to accelerate value from its newly acquired assets.

That’s a hefty price but BHP needs the people and the assets. After several failed bids to consolidate in the mining industry, the company turned to investing in oil & gas exploration and production.

The Petrohawk acquisition follows BHP’s $4.75 billion acquisition of Chesapeake’s Fayetteville Shale assets. BHP only got the assets in the Chesapeake deal, so over the next year the company was tasked with building a large US E&P business. The Petrohawk acquisition gives them the human capital and just happens to be a company that was a leader in the Fayetteville Shale before divesting assets to focus in the Haynesville Shale and Eagle Ford Shale.

BHP gets Petrohawk with its three core positions which include 225,000 acres in the Haynesville Shale, 120,000 net acres in the Lower Bossier Shale, 332,000 acres in the Eagle Ford Shale, and 325,000 acres in the Midland/Delaware basins, which is prospective for the Avalon Shale, Bone Springs, and Wolfcampian formation.

Combined with the Chesapeake deal, BHP will become one of the top ten natural gas producers in the US. The company’s onshore US operations will include almost 1,500,000 net acres that produce over 1.3 Bcf per day. [Read more…]

Petrohawk Eagle Ford Shale Gas Discovery

Petrohawk announces Eagle Ford Shale gas discovery in South Texas.  The company is leveraging its shale gas experience into the growing shale business in South Texas. Initial results indicate the Eagle Ford will produce more liquids than the Haynesville and Fayetteville. The company’s discovery well is part of a 100,000 acres holding in La Salle County, TX.  [Read more…]

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