Sanchez Energy Sells Eagle Ford Assets

Sanchez Sells Eagle Ford Acres

Sanchez Energy has sold 21,000 Eagle Ford acres to Lonestar Resources in order to shift its focus to the other side of the region.

Related:  Sanchez Gains Eagle Ford Assets for $2.1 Billion

Sanchez announced this week they will divest of non-core assets in Fayette and Lavaca Counties for $50 cash and 1.5 million shares of stock. 

This recent deal is part of Sanchez' strategy to increase its focus on the growth of the Comanche, Catarina and Maverick areas of the Western Eagle Ford.

Purchase Highlights

  • Cash consideration of $50 million and Lonestar preferred stock that is structured to convert into 1.5 million shares of common stock;
  • Assets consist of approximately 21,000 net acres primarily located in Fayette and Lavaca Counties, Texas;
  • Net proved reserves of 2.7 MMBoe (100% developed); and
  • Net production of approximately 1,750 barrels of oil equivalent per day (“Boe/d”) (74% oil) from 104 gross (65 net) wells.
The acquisitions announced today are transformational for Lonestar. We have scaled our business with Eagle Ford Shale properties that are located in our core area which our technical team understands extremely well.  
— Frank D. Bracken, III-Lonestar’s CEO

In March, Sanchez closed on a $2.1 billion deal with Anadarko Petroleum through a 50/50 partnership with Blackstone Energy Partners. The 'Comanche Transaction' increased Sanchez' total net proved reserves to approximately 340 MMBoe, a 78% increase from year-end 2016 reserves. 

Methane Levels in Eagle Ford Water Insignificant

Fracking Facts

Oil and gas production in the Eagle Ford is not significantly impacting drinking water wells, according to a new study.

Fracking & Water Safety: New Technology

A recent study by the U.S. Geological Survey assesses the effects of oil and gas activity on water quality in several shale fields. 

The article, published in the Journal of Environmental Science & Technology, tested  116 wells in the Eagle Ford, Fayetteville, and Haynesville shale formations. Of the wells that tested positive for methane, 90 percent had concentrations lower than 10 milligrams per liter. Researchers concluded that these methane levels are not enough to significantly affect drinking water, though it might take decades to fully assess the situation. 

Methane isotopes and hydrocarbon gas compositions indicate most of the methane in the wells was biogenic and produced by the CO2 reduction pathway, not from thermogenic shale gas.
— USGS Study

In the midst of the fracking debate, many have raised concerns about the amount of water used in the fracking process and the potential danger to the depletion of our nation’s water supply. 

Fracking Facts: Is Our Water Supply at Risk?

Last year, researchers from the UK announced the development of a new way to check for water contamination in order to monitor the safety of shale gas and coal bed methane extraction. Other fracking studies include:

  • Yale: measured well water near fracked wells concludes that ‘there was no evidence of association with deeper brines or long-range migration of these compounds to the shallow aquifers
  • EPA: claimed certain fracking activities that have the potential to impact drinking water resources but found no evidence that these activities have led to widespread, systemic impacts on drinking water in the United States.
  • John Hopkins : concluded possible adverse health outcomes associated with fracking

Eagle Ford Shale Rig Count Takes a Dive

The Eagle Ford Shale rig count shrunk by three this week, with our data showing 94 rigs running across our coverage area by midday Friday.

The rig count slowly increased during the first months of 2017, with many viewing this as a sign of recovery for the Eagle Ford Shale region. After a high in May of 101 rigs, the weekly rig count has waffled through June.  

Read more: Eagle Ford Rig Count Pushes to 101

A total of 941 oil and gas rigs were running across the United States this week, an increase of eight over last week. 183 rigs targeted natural gas (three less than the previous week) and 758 were targeting oil in the U.S. (11 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 460 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Eight rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $2.93/mmbtu.

86 Eagle Ford rigs were targeting oil with WTI oil prices at $43.01.

A total of 91 rigs are drilling horizontal wells, zero are drilling directional wells and three are vertical.

Karnes County leads this week with 21 rigs in production. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Rig Count by County-June 23, 2017

Eagle Ford Rig Count by County-June 23, 2017

 

Eagle Ford Shale News

NAFTA Revision Could Mean Energy Independence

Texas Railroad Railroad Commission Gains Funding

Crude Production Rises in Eagle Ford and Across U.S.

Lonestar Increases Eagle Ford Holdings in 'Transformational' Deal

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

The Eagle Ford Shale drilling rig count has had its ups and downs, marking the rise of the region's shale development and the decline brought on by low crude prices. The following infographic shows the rig count trends since 2011.Eagle Ford Rig Count

Texas and Eagle Ford Gain 0 Rigs

Drilling Rig

The Eagle Ford Shale rig count was unmoved this week with our data showing 97 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, Railroad Commissioner, Christi Craddock is hailing the importance of NAFTA negotiations to the oil and gas industry in Texas.

Read more: NAFTA Revision Could Mean Energy Independence

A total of 933 oil and gas rigs were running across the United States this week, an increase of six over last week. 186 rigs targeted natural gas (one more than the previous week) and 747 were targeting oil in the U.S. (six more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 460 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Nine rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $3.04/mmbtu.

88 Eagle Ford rigs were targeting oil with WTI oil prices at $44.74.

A total of 94 rigs are drilling horizontal wells, zero are drilling directional wells and three are vertical.

Karnes County leads this week with 20 rigs in production. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Rig Count by County-June 16, 2017

Eagle Ford Rig Count by County-June 16, 2017

 

Eagle Ford Shale News

NAFTA Revision Could Mean Energy Independence

Texas Railroad Railroad Commission Gains Funding

Crude Production Rises in Eagle Ford and Across U.S.

Lonestar Increases Eagle Ford Holdings in 'Transformational' Deal

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

The Eagle Ford Shale drilling rig count has had its ups and downs, marking the rise of the region's shale development and the decline brought on by low crude prices. The following infographic shows the rig count trends since 2011.Eagle Ford Rig Count

NAFTA Revision Could Mean Energy Independence

Revising the North American Free Trade Agreement (NAFTA) could mean energy independence for North America, according to Railroad Commissioner, Christi Craddick. 

Related: Eagle Ford Shale and Mexico: An Important Partnership

Last month, the Trump Administration announced its intention to renegotiate the North American Free Trade Agreement (NAFTA). Formal negotiations could begin with Mexico and Canada as early as August 16th.

The original agreement was negotiated over 23 years ago and lacks important regulations for e-commerce, intellectual property, and tougher environmental standards.

Texas has a lot riding on the future of NAFTA. Mexico and Canada are the state's largest trading partners, with billion changing hands every year and thousands of jobs at stake. 

  • Texas exported over $232 billion of goods and services in 2016
  • Texas exported $93 billion to Mexico
  • Texas exported almost $20 billion to Canada in 2016
  • In 2014, over 41,000 Texas companies exported goods from a Texas address

Railroad Commissioner, Christi Craddock wrote an article last week hailing the importance of NAFTA negotiations to the oil and gas industry in Texas. She emphasized the work that has taken place over the last two years building the infrastructure to move natural gas to Mexico. Renegotiations might allow for better coordination of these efforts. 

Overall, NAFTA has been great for Texas. We run a trade surplus with our neighbor to the south, with Mexican exports accounting for 6 percent of the state’s GDP, compared to 1.3 percent nationwide. However, there are some areas where the original 1993 agreement is either silent or outdated. President Trump’s plans to work with Canadian and Mexican officials to revise the treaty could offer U.S. businesses and consumers a once-in-a-generation opportunity to build on what came before. Given my focus in the energy sector, three areas I would like to see included in negotiations relate to energy infrastructure, investment and the environment.
— Christi Craddick, Texas Railroad Commissioner

Craddick expressed hopes that Texas will provide leadership in the negotiations. As one of the leading regulators of oil and gas in the world, the Railroad Commission has led the way in developing best practices and standards.