El Paso Corporation recently announced it will be acquired by Kinder Morgan. That means El Paso's Eagle Ford assets might be on the market soon. In the mean time, the company reported results from the third quarter of 2011. The addition of a gathering system in the area will alleviate constraints and forth quarter production is expected to jump to 17,500 boe/d gross from 10,500 boe/d gross in Q3. The midstream group's gathering system will have capacity for 150 mmcfd and 80,000 bbls/d by year-end 2011.
Eagle Ford oil production growing rapidly with completion of natural gas facilities
El Paso's Midstream Group has completed the natural gas system for the EF Central area, which eliminates what had been a major production constraint caused by limited natural gas takeaway capacity. Gross daily Eagle Ford production for the third quarter 2011 was approximately 10,500 BOE/d. Fourth quarter 2011 gross production is expected to rise significantly to 17,000 to 18,000 BOE/d. El Paso expects to operate three rigs in this area for the remainder of the year.
The Midstream Group (Midstream) has successfully completed its natural gas gathering facilities in the area in south Texas. The system includes 83 miles of pipeline with a capacity of 150 MMcf/d. Also, Midstream is developing a 68-mile oil pipeline network with a capacity of 80,000 Bbls/d in the area, which is expected to be operational before year-end. Midstream reported that it did not receive adequate commitments for its Marcellus Ethane Pipeline System (MEPS) project to proceed at this time.