Kinder Morgan (formerly El Paso)

El Paso and Kinder Morgan announced a $38 billion merger in October of 2011. Kinder Morgan's primary focus is in the pipeline and midstream business. It might not be long before El Paso's Eagle Ford assets are on the market? El Paso began leasing in the Eagle Ford Shale in 2008 and has built a position that spans several counties in the central and southern portions of the play.  El Paso is very positive on the Eagle Ford and plans to continue increasing its activity going forward.  The company's largest acreage block is in La Salle County in what the company calls the volatile oil window.  Wells in the the volatile oil window have yielded the best results to date and this area will continue with the most intensive activity of the company's Eagle Ford fields.

El Paso E&P Company is a large integrated natural gas, oil, and natural gas liquids producer, which is integrated with El Paso's pipeline company.  The parent company's stock is traded on the NYSE under the symbol EP.  El Paso headquarters is in Houston, TX and the company has a field office in Yoakum, TX that services South Texas.  The parent is currently in the process of splitting its pipeline and E&P divisions into two separate entities.

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Counties Where El Paso is Active

El Paso Eagle Ford Shale Map
El Paso Eagle Ford Shale Map




El Paso Eagle Ford Shale Quarterly Commentary

Press Release

August 4, 2011

“In our E&P business, spending was up for the quarter, reflecting higher activity levels in our Eagle Ford oil program. And Brent is going to give you an update in just a few minutes on our non-core asset divestitures, which will more than adequately fund the increase in the Eagle Ford drilling and completion capital we announced back in May.”

"...I'll begin to update on this morning on Slide 19. As J.R. noted, we had a very good quarter with a 7% increase in adjusted EBITDA, again primarily driven by higher production, higher oil prices. Production was up 4% from last year's second quarter, even though we had to deal with the impact for some third-party downstream disruptions that I'll cover more in a moment. And in spite of those disruptions, our 2011 production target's still very much on track. Well, I can say volumes were up 5% for the quarter and they'll continue to ramp up significantly in the second half of the year. And we've included a chart that shows our Eagle Ford program, how our Eagle Ford program will contribute to that growth..."

Source: El Paso Corporation

Press Release

May 5, 2011

“We announced earlier this quarter that after a lengthy process, we’ve decided to go it alone on our Eagle Ford acreage. We had a fulsome process and received quality bids. In the end, however, our judgment was that the highest return outcome for our shareholders was to hold this acreage and develop it ourselves at our pace.

As we’ve matured our activity there, we’ve gained confidence that this is the kind of high-quality, repeatable resource that fits our strategy to a tee. As this occurred and we derisked the acreage, its value went up. And given current and anticipated commodity prices, we felt that the value of this high-quality liquids inventory was key to our ongoing E&P story.”

Source: El Paso Corporation