Oil India Eagle Ford Position Coming Soon?

Oil India is out wining and dining Eagle Ford operators. The company announced it is looking for a minority stake of 20-30% in U.S. shale acreage and is looking at the Eagle Ford. Gail and Carrizo Inked an Eagle Ford JV in September of 2011 and Reliance and Pioneer inked a shale deal in 2010, so it’s no surprise to see Oil India might want to follow suit.

Oil India has spoken with ConocoPhillips and word hit the news wire early Monday. While it is not out of the realm of possibility, a joint-venture between the two companies would likely include much more than the $200-300 million investment Oil India is looking to make. Oil India might have assets it is willing to trade, but if not the company is much more likely to find a suitable partner in a company with a smaller acreage position. Using the $25,000 per acre price paid in the Hunt Oil -Marubeni Partnership announced two weeks ago, Oil India is in the market to buy 10,000-15,000 acres of prime Eagle Ford acreage. That’s much less than 20-30% of Conoco’s 220,000+ acres in the play. If the two companies reach an agreement, it will include additional consideration or it will be limited to a much smaller area than Conoco’s current footprint in South Texas. [Read more…]

Exporting Eagle Ford Gas is One Step Closer

Cheniere Energy announced the week before Christmas that it has plans for a Texas natural gas export facility near Corpus Christi and that it reached a supply agreement with an Indian company for gas exported from the Sabine Pass export terminal in Louisiana.

Through its Corpus Christi Liquefaction subsidiary, the company began the regulatory process for getting approval to add a 2 Bcf/d export facility in the La Quinta Channel on the Northeast side of Corpus Christi Bay in San Patricio County, TX. An export facility where operators can lock in higher gas prices for extended periods would expand commercial development of the Eagle Ford further into the dry gas window.

Cheniere Energy also added a supply agreement at its Sabine Pass facility. The company and GAIL Limited have agreed to a 20 year deal where the Indian company will purchase 3.5 mtpa or close to 500 mmcfd of gas at a price indexed to Henry Hub. The contract begins with the first commercial delivery.

GAIL signed an Eagle Ford JV agreement with Carrizo in September of 2011 and the deal with Cheniere is a big step in ensuring the company realizes better natural gas prices.  [Read more…]

Carrizo Oil & Gas Production Slowed by Gathering and Service Delays

Carrizo Oil & Gas wells in the Eagle Ford continue to meet or exceed expectations, but delays in bringing on the company’s gathering system held gas production levels below their potential. Service company equipment problems also led to delays.

Even with third quarter delays, Carrizo is poised for strong Eagle Ford growth in the fourth quarter. The company has a corporate wide objective of reaching 5,000 bbls/d of oil by year-end. That’s roughly double the company’s average in the third quarter. South Texas wells will play an integral part in the company reaching that target.

The Gas Authority of India, Limited (GAIL) is a 20% working interest partner with Carrizo across over 20,000 net acres in the Eagle Ford. The Carrizo – Gail JV was announced at the end of September, 2011. [Read more…]

GAIL – Carrizo Joint Venture Agreement in the Eagle Ford

The Gas Authority of India Limiated (GAIL) becomes the latest international company to enter the Eagle Ford. On September 28, 2011, GAIL announced a joint venture agreement with Carrizo Oil & Gas on a portion of the company’s Eagle Ford Shale assets. The Indian oil & gas company will gain a 20% interest in 20,200 net acres owned by Carrizo in South Texas. That’s 4,040 net acres to the company for $95 million in total consideration. Almost $64 million will be paid upfront and more than $31 million will be paid over the next year in the form of a drilling carry.

Carrizo is selling an interest in eight existing horizontal wells as part of the deal. Production from the wells is running at a rate of 1,700 barrels per day and 3.8 mmcfd. With consideration for production, the acreage traded for somewhere between $13,000 and $14,000 per acre. That’s off previous acreage prices paid in the Talisman-SM Energy deal, as well as the record Marathon-Hilcorp deal, but don’t forget oil prices are down almost $20 per barrel in that same period. [Read more…]

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