TxDOT: $569 Million Needed for Eagle Ford Roads

TxDOT says it needs to spend $569 million to improve Eagle Ford roadways, according to a presentation released by the agency.

Related: Eagle Ford County Roads a Mess

In small towns all across the Eagle Ford, oil and gas activity has left a mess of the county roads system. Poor road conditions, increased traffic and heavy equipment brought on by the oil boom have contributed to the unsafe conditions.

In March, TxDOT began a new initiative to address these issues state-wide in hopes to provide safety enhancements on roadways across the state’s energy regions.

The improvements will include:

  • Strengthening pavement structures
  • Adding shoulders to protect pavement edges
  • Adding turn lanes at key intersections
  • Constructing passing lanes on Super 2 corridors
TxDOT districts have identified energy sector projects, by prioritizing corridor segments that cross multiple districts, directly connect energy sector activity nodes or have high frequencies of injury or fatal crashes. TxDOT categorized these identified corridors into Priority 1 and Priority 2 groups based on the improvements needed. The table shows current estimates for Priority 1 funding needs in the five major energy sector regions.
— TxDOT's Website

Eagle Ford Shale corridor priorities include:

  • SH 97 (LRD, SAT, YKM)
  • SH 72 (CRP, YKM)
  • US 83 (LRD, SAT)
  • US 59 (LRD, CRP, YKM)
  • SH 16 (SAT, LRD)
  • SH 85 (LRD, SAT)
  • US 183 (CRP, YKM)
  • US181/SH123 (CRP, SAT)

Roads in the Eagle Ford Shale are under intense pressure from the huge volumes of truck traffic that are regularly running up and down South Texas highways – literally hundreds of trips per day in many cases. And, often, the counties have not been able to keep up with the problems caused by the increased volume.

Read the full presentation here

More Eagle Ford LNG Headed Abroad

  LNG Exports Headed to non-Free Trade Countries

LNG Exports Headed to non-Free Trade Countries

Federal officials give the go-ahead for one Texas refinery to ship Eagle Ford LNG around the world.

Related: Natural Gas Will be a Boom for Eagle Ford Companies

The U.S. Department of Energy has authorized Flint Hills Resources to export liquefied natural gas (LNG) to countries that do not hold a free trade agreement (non-FTA) with the U.S. The order allows Flint to export LNG 3.62 billion cubic feet of natural gas per year over the next 20 years.

Flint Hills plans to purchase the LNG from Stabilis LNG, which is located in Live Oak County.

In April, the U.S. Senate passed the Energy Policy and Modernization Act designed to increase U.S. exports of liquefied natural gas (LNG).

Exporting our surplus natural gas overseas will not only benefit our allies abroad, it will also drive significant investment into the domestic economy while making sizeable reductions in global greenhouse gas emissions. The shale revolution has fundamentally transformed the American energy landscape; LNG exports now represent an opportunity to allow the rest of the world to benefit.
— Center for Liquefied Natural Gas (CLNG) Executive DirectorCharlie Riedl

Eagle Ford midstream companies are looking to prosper as natural gas exports overtake imports over the next 16 months. The state is in the middle of a massive LNG export terminal buildout along the Gulf Coast.

Read more at BizJournal.com

Devon: Eagle Ford Brings Highest Margins

Devon Energy executives reported a solid first quarter with the highest margins coming from their Eagle Ford assets. The company’s focus has them on track to produce cost saving of more than $1 billion this year.

Related: Devon Energy to Cut 1,000 Jobs

In the midst of tough conditions, Devon’s ‘lasor-focused’ efforts have delivered significant cost reductions and accelerate efficiency gains. First quarter highlights included a net production of 107,000 Boe per day and operating costs of $58 million, an 18% reduction year over year.

In spite of the challenging industry conditions, Devon achieved another high-quality operating performance in the first quarter as we continued to take the appropriate steps to deliver significant cost reductions and accelerate efficiency gains across our portfolio. These successful efforts resulted in production exceeding the midpoint of guidance for all products and operating costs declining by more than 20 percent year over year.
— Dave Hager, president and CEO

Eagle Ford Operations

Devon’s Eagle Ford operations produced the highest per‐unit margin of any its asset, averaging $13 per Boe, with margins approaching 70% of upstream revenue.The company’s DeWitt County ‘s 50,000 acres are very economical and by far one of the best places to be operating. That asset alone generated $78 million in free cash flow during the first quarter.

Other first quarter highlights include:

  • Drilling times improved by >55% compared to the 2014 average
  • A record rate of 26 wells per rig line per year achieved this quarter
  • Assets generated $78 million of free cash flow and remain on pace to deliver >$250 million of free cash flow in 2016
  • Raised full-year production guidance by 3 percent
  • Reduced LOE costs by 21 percent year over year
  • Lowered 2016 operating cost outlook by $50 million
  • Improved balance sheet strength with liquidity increasing to $4.6 billion
The Eagle Ford has taken a larger – projected to take a larger drop from Q1 of 2016 to Q2 of 2016. But, again, as we bring – we’ve taken a completion holiday there as we bring completion units back into the field in the latter part of Q2, we’ll see that production stabilize from Q2 through Q4 in the Eagle Ford. Month to month, it’s going to be pretty cyclical just depending on the pace of new wells that we bring on.

Devon has plans to spend $200 million developing the Eagle Ford this year compared to $1 billion on its Eagle Ford asset.

In February, Devon announced layoffs of 20 percent of its workforce, or 1,000 employees company wide.

Read more at DevonEnergy.com

Lonestar: Eagle Ford Production Up 23%

  Lonestar Releases First Quarter Earnings

Lonestar Releases First Quarter Earnings

Lonestar Resources plans to focus the rest of 2016 on its Eagle Ford assets in Dimmit, LaSalle and Gonzales Counties.

Related: Earthstone Energy Looks to Resume Eagle Ford Activity

In a first quarter earnings report, Lonestar announced an 18% increase in net oil and gas production to 6,553 BOEPD in 1Q16, vs. 5,547 BOEPD in 1Q15 along with a net loss of $11.3 million.

Eagle Ford Operations

Throughout the quarter, Lonsestar focused its technical and capital resources on the Eagle Ford Shale and boasts an increase of 23% for oil and gas volumes compared over the first quarter of 2015.

“Lonestar currently plans to drill and complete a total of 6 to 7 net wells (9 to 10 gross wells) at today’s NYMEX strip prices, with a focus on Dimmit, LaSalle and Gonzales Counties. The Company’s plan is intended to result in no change in the Company’s net debt position at December 31, 2016 and yield annual average production which Lonestar estimates would range from flat to an increase of up to 10% over 2015 results.”

Highlights include:

  • Assets averaged 5,954 BOEPD during the first quarter of 2016, and was comprised of 3,066 barrels of oil per day, 1,391 barrels of NGL’s per day, and 8,987 Mcf of natural gas per day
  • 75% of production was derived from liquid hydrocarbons, 51% of which was derived from crude oil
  • Operating expenses from Eagle Ford Shale assets totaled $4.1 million, a 14% increase over the first quarter of 2015
  • On a unit of production basis, field operating expenses decreased 9% to $7.53 per BOE, year-over-year as production volumes continued to grow.

Read more at LonestarResources.com

Former Oilfield Workers Look to New Careers

  Texas Oil & Gas Jobs Decline

Texas Oil & Gas Jobs Decline

Former Eagle Ford oilfield workers turn to law enforcement after work in the oil patch dries  up.

Related: The Eagle Ford Loses More Jobs

After months of low crude prices and tens of thousands of layoffs, many oilfield workers are scrambling to find other work and some are deciding on police work, according to the San Antonio Biz Journal.

At the height of the boom, it wasn’t uncommon to see police officers hanging up their guns for the better paying jobs in the oil patch. But these days, those lucrative jobs in the Eagle Ford have dried up and last year at least three former oilfield workers graduated from the Alamo Area Regional Law Enforcement Academy.

Police academy instructor Jose Robledo is not surprised to receive displaced workers from the oil industry, noting that law enforcement is steady work in an uncertain economy. In addition to the two oil field workers, Robledo said this past graduating class included a mix of ages, experiences and careers ranging from recent college graduates to ex-military personnel to mothers looking to start second careers.

Biz Journal

The Alamo Regional Law Enforcement Academy moved into a new home last year after receiving some $2.5 million in donations. The new 20,700-square foot facility allows the to expand its operations to include more classrooms and training space. The facility also houses AACOG’s Homeland Security, Regional 9-1-1, and Criminal Justice Planning programs.

Nearly 100,000 U.S. workers lost their jobs in the oil and gas extraction and supporting segments between October 2014 and January this year. More than half of those were in Texas, according to statistics from the U.S. Bureau of Labor.