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Texas Royalty Owners Win $52.5 Million
Texas Royalty Owners Win Big
Chesapeake Energy and Total E&P have agreed to pay $52.5 million to landowners who were cheated out of natural gas royalties.
Related: Chesapeake Owes Fort Worth School District $1 Million
The two energy companies announced on Monday that they will settle lawsuits filed by 13,000 property owners on Tarrant and Johnson counties.
“We are pleased to have reached a mutually acceptable resolution of this legacy issue and look forward to further strengthening our relationships with our royalty owners,” Chesapeake spokesman Gordon Pennoyer said in a prepared statement.
Chesapeake is ordered to pay $29.3 million, with Tootal paying $13.1 million in cash. Chesapeake will pay another $10 million in three years.
McDonald law firm and Cicelli, Walter & Young represent the plaintiffs, who must still approve the deal by a vast majority (90%). Payments will vary based on production and lease language and will likely range from a few hundred to several thousand dollars.
In April, Chesapeake Energy revealed they would pay the Fort Worth School District $1 million in royalties after reaching an out-of-court settlement from a 2014 case where the school district. The company had improperly deducted expenses from royalties owed to the district and its taxpayers.
Kinder Morgan: Eagle Ford Production Down 28%
Kinder Morgan Releases First Quarter Earnings
Kinder Morgan has lowered its 2016 guidance due to a 28% decline in production from their Eagle Ford shale assets.
Related: Penn Virginia Corp. Files Chapter 11
In an earnings call last week, Kinder Morgan chief executive Steve Kean reported a good first quarter with cash flows in excess of $1.2 billion plus a reduction in their growth capital backlog from $18.2 billion at the end of the fourth quarter 2015 to $14.1.
Kinder Morgan’s combined oil production across all of our fields was down 7% in the first quarter, averaging 56.4 MBbl/d, down 6 percent from 59.8 MBbl/d for the same period in 2015.
The Houston-based company lowered its overall 2016 earnings guidance by 3%, attributing over half of that to the declines in the Eagle Ford volumes.
“While Eagle Ford volumes declined overall, and we are projecting declines on our assets going forward, we have seen volumes grow on our KMCC (Kinder Morgan Crude and Condensate) pipeline,” Kean said. The 300,000 b/d line, which carries Eagle Ford liquids to the Gulf coast, is starting to see volumes slow. “We think we’ve just started to see some flattening on that pipeline, but what we’ve done on this pipe is essentially grow our market share.”
EnerVest Grabs Eagle Ford Assets for $1.3 Billion
EnerVest Ltd. increases their Eagle Ford Shale assets in new deals worth $1.3 billion.
Related: Producers Defend Fracking Practices
In a recent press release, Houston-based EnerVest Ltd, announced they had completed the last in a three-part purchase on Eagle Ford assets in a concentrated part of Karnes County.
In the latest deal, expected to close in June, EnerVest will acquire 7,056 net acres from BlackBrush Oil and Gas LP. The assets include 341 drilling locations and produce 5,170 barrels of oil equivalent per day.
Since 2015, EnerVest has been gobbling up acres and assets in the Eagle Ford including:
- April 29, 2016
- 4,198 net acres from affiliates of San Antonio-based GulfTex
- 256 drilling locations
- Produce 8,568 barrels of oil equivalent per day
- Fall 2015
- $125 million purchase of Houston-based Alta Mesa Holdings LP’s
- 1,760 net acres with 278 drilling locations and 7.8 million barrels of oil equivalent of reserves
- Producing 2,200 barrels of oil equivalent per day
“This is a great time in the commodity price cycle to buy oil assets, especially in the core of one of the hottest plays in the U.S.,” John Walker, EnerVest CEO, said in a statement. “With stacked reservoirs of the Lower Eagle Ford, the Upper Eagle Ford and the Austin Chalk, we see plenty of development opportunities at today’s prices.
In June, Enervest executives were summoned to Austin to try and persuade the Texas Railroad Commission that their operations are not to blame for recent earthquakes in North Dallas. The company was eventually cleared of any wrong doing in relation to a link between fracking and the Dallas quakes.
Earthstone Energy Looks to Resume Eagle Ford Activity
Earthstone Energy resumes Eagle Ford activity
Earthstone Energy executives express optimism that they can increase their Eagle Ford activity this summer as crude prices continue to move higher.
Related: Earthstone Reports ‘Decent’ Q4
The Woodlands-based company announced a challenging first quarter that included a 7% decrease in production. The company made crucial due to decisions to defer certain capital expenditures throughout the quarter due to weaknesses brought on by crude prices.
“This decrease was due to lack of completion activity on the 12 Eagle Ford wells that we have drilled, but are waiting on completion along with natural declines on well drilled in 2015 and the fact that we chose to allow flowing wells to continue to produce at lower rates as a result of postponing the capital expenditures for installing artificial lift on those flowing wells.”
2016 Q1 highlights:
- Average daily production of 3,576 Boepd
- Total revenue of $8.9 million, which includes the effects of realized hedges
- Lease operating expense decreased 30% relative to the first quarter of 2015
- Adjusted EBITDAX(1) of $1.9 million
Read more about Earthstone in the Eagle Ford
Eagle Ford Operations
Approximately 60% of Earthstone’s operated Eagle Ford acreage is held by production. The Company has 12 gross Eagle Ford locations waiting on completion from four units.
For the rest of 2016, the company has allotted $4.0 million to spend on the Eagle Ford.
“With price improvement, we believe we can ramp up production with our frac inventory while re-establishing drilling activities. We will likely complete our four-well Boggs Unit in Karnes County this summer.”
Last week, Earthstone announced it had completed their acquisition of Lynden Energy Corp anticipating production of approximately 4,900 barrels of oil equivalent per day.
Read more at EarthstoneEnergy.com