Eagle Ford Flaring Impact on South Texas - Video

August 22, 2014 Kirk Eggleston

Since the Eagle Ford oil boom began in 2009, the prolific development of the liquids-rich shale formation has put Texas in an enviable position on the world-stage as a top oil producer. As with any boom, there have been positives and negatives associated with development. This week, the San Antonio Express News published an investigative report highlighting one of the negatives - the flaring of natural gas. As companies have aggressively developed the Eagle Ford Shale to benefit from the current high price of oil, natural gas, a lower priced commodity, has been flared in the process. A lack of natural gas pipeline infrastructure in some areas has also contributed to flaring. Federal rules implemented in 2011 that require greenhouse gas permits for things like compressor stations and processing plants have likely tied up pipeline projects that would've otherwise been implemented. Still, pipeline companies, which generally conduct an open season prior to beginning construction on a project, have had trouble getting enough commitments for natural gas pipelines in other oily plays like the Bakken Shale in North Dakota, which is the second most significant U.S. domestic shale play to the Eagle Ford. The Bakken Shale currently flares nearly 30% of its natural gas.

According to the paper, oil producers flared and vented 32.7 billion cubic feet (Bcf) of casinghead gas from 2009 to 2012. That's nearly 8% of all casinghead gas produced in the region, and 10 times higher than the flaring rate in the rest of Texas. During the same time frame, La Salle County, a top producer in the play, flared or vented about a fifth of its production — more than 10 million cubic feet (MMcf). At oil wells in Atascosa and Frio Counties, energy firms flared a quarter of the 17 Bcf of casinghead gas they produced. Companies operating in Wilson County produced nearly 1.4 Bcf of gas from oil wells, but flared or vented more than a third of it.

The question is could flaring be affecting health and quality of life. For some South Texas residents, there's no question - Yes! The paper revealed that an estimated 15,000 tons of volatile organic compounds and other contaminants were released into the air in 2012 from flaring.

Abraxas Petroleum Operations Update Reveals Strong Initial Production (IP) Rate for McMullen County Well

April 9, 2014 Kirk Eggleston

San Antonio-based Abraxas Petroleum Corp. had good initial production on one of its' Cave Prospect wells, located in McMullen County, in the first-quarter of the year. In its' first 30-days, the Dutch 2H had average production of 1,093 boe/d.

According to company officials, Abraxas will shut-in the well for 60-days to drill an off-set well, when drilling is completed on its' Eagle Eyes 1H well, located in the company's Jourdanton prospect, in Atascosa County.

“The productivity of the Dutch 2H meaningfully surpassed our expectations, and we recently elected to drill the Dutch 1H to minimize operational impacts and fully develop the two well pad. We will still have another pad in inventory to drill at our Cave Prospect, the Dutch 3H and Dutch 4H. ”

— Bob Watson, President and CEO of Abraxas

Jourdanton Prospect (Atascosa County, TX)

Abraxas has a 100% working interest (WI) across its' Jourdanton Prospect. Here is a brief overview of the company's current operations in the area:

Blue Eyes 1H - 527 boe/d (30-day), 466 boe/d (60-day), 460 boe/d (90-day)
Snake Eyes IH - Completed; Well is flowing to sales
Spanish Eyes IH - Drilled to total depth of 12,346 feet and scheduled for fracking
Eagle Eyes 1H - Drilled to 7,182 feet so far; This is the company's fourth Jourdanton Prospect well

Cave Prospect (McMullen County, TX)

Abraxas has a 100% working interest (WI) in its Dutch 2H well in the Cave Prospect. Here is a brief overview of the company's current operations in the area:

Dutch 2H - 1,093 boe/d (30-day)
Dutch 1H off-set well to Dutch 2H will be drilled when Eagle Eyes 1H drilling has finished
60-Day shut-in of Dutch 2H will commence with the drilling of the Dutch IH well

Dilworth East Prospect (McMullen County, TX)

Abraxas has a 100% working interest (WI) in its R. Henry 2H well in the Dilworth East Prospect. The company plans to complete the R. Henry 2H in May when gas takeaway is available at the lease.

Abraxas is also active in the Bakken, with operations focused in McKenzie County. The company is currently doing its' first downspacing tests in the Middle Bakken.

New Standard Energy Completes Drilling Operations on its First Eagle Ford Wells

March 24, 2014 Kirk Eggleston

Magnum Hunter Resources Eagle Ford Acreage Map

Australia-based New Standard Energy completed drilling operations on its second Eagle Ford well (Peeler Ranch 6-H) in late March 2014. The first well (Peeler Ranch-5H) was completed at the end of February 2014. New Standard entered the Eagle Ford in December 2013 when the company acquired Magnum Hunter Resources' Eagle Ford assets in Atascosa County, TX.

The wells are operated on the company's behalf by Magnum Hunter. New Standard has a 98.4375 % working interest and a 72.4125 % net royalty interest in the two wells.

Magnum Hunter is a New Standard shareholder, and the companies have formed a strategic business partnership in the play. As drilling continues, New Standard will work with Magnum Hunter to identify drilling locations.

“We have had an excellent start to our Eagle Ford drilling campaign and look forward to continuing to work alongside the team at Magnum Hunter to deliver more wells within budget and on time to facilitate increased production and revenue.”

— New Standard Energy Managing Director Phil Thick

Both New Standard Eagle Ford wells were drilled in parallel lateral lengths, targeting the same hydrocarbon bearing zone in the formation. The wells will be fracked in April 2014, using the "zipper frac" method, which alternates frac stages between the two wells. According to company officials, production will begin in late April or early May. The two wells will add to the five existing wells already in production within the acreage.

Magnum Hunter Signs Option To Sell Pearsall & Eagle Ford Assets ~$25 Million

December 12, 2013 R.T. Dukes

Magnum Hunter (MHR) has granted New Standard Energy, an Australian company, the option to acquire Pearsall Shale and Eagle Ford Shale assets in Atascosa County.

New Standard paid $75,000 for the option and will pay an additional $15 million in cash and $9.5 million in equity.

In total, Magnum Hunter will receive a little less than $25 million for ~5,200 net acres and 300 boe/d of production from five wells. New Standard has until January 21, 2014, to exercise the option.

The deal is part of ~$700 million in divestitures that will allow the company to focus on development of assets in the Marcellus and Utica shales.

“Our ability to grow both production and reserves at the highest internal rate of return within our existing asset base, undoubtedly lies in our acreage position located in the Utica and Marcellus Shale resource plays.”

— Mr. Gary C. Evans, CEO

Also read:Magnum Hunter Completes PVA Deal - Still Targeting the Eagle Ford and Pearsall

Magnum Hunter plans to spend $400 million in 2014, with $260 million allocated in the Utica and Marcellus, $50 million planned in the Bakken, and $90 million spent on midstream infrastructure.

If the option is exercised by New Standard Energy, this deal likely ends Magnum Hunters upstream activity in the Eagle Ford and Pearsall completely.