Halcon Allocating More Capital To Its Brazos County Eagle Ford Development

Halcon Eagle Ford Activity Map

Halcon announced plans to spend $100 million targeting the Eagle Ford in Brazos County in 2013 just two months ago. Now, the company might spend double or triple that number.

The company didn't say how much more capital would be allocated to the play, but said "capital is being reallocated to El Halcon from the Woodbine..."

When plans were to spend $100 million in the play, Halcon stated it would operate 1-3 rigs throughout the year. It's just June and the company already has 5 rigs working the play. The company had planned to spend ~$390 million in the Woodbine, so if we assume half of the capital is reallocated to the Eagle Ford, it is very likely Halcon will spend between $200-300 million this year alone.

Eagle Ford Laterals Getting Longer

The two most recent wells drilled in the area have average laterals of 8,349 ft and came online at more than 1,100 boe/d (94% oil) each. Those rates were achieved with a 16/64 choke and represent improvement of 18% over recent wells.

The Bison 1H well in Brazos County was drilled from spud to total depth in less than 11 days, including a 9,000+ ft lateral.

Halcon is also utilizing pad drilling where possible and set casing on three wells in just nine days.

Halcon has 9 wells producing in the area, 5 wells awaiting completion and 5 wells being drilled.

Highlights from the operations update weren't limited to the Eagle Ford, Halcon also announced a Bakken well that produced more than 3,000 boe/d. Read the full operations update at halconresources.com

Double Eagle Pipeline Moving Eagle Ford Condensate to Corpus Christi

Double Eagle Pipeline - Eagle Ford Condensate System

Double Eagle Pipeline, LLC, a joint venture between Kinder Morgan and Magellan Midstream, has started moving condensate to Corpus Christi.

The pipeline is part of a project that was started by Copano and Magellan, but is operated by Kinder Morgan who purchased Copano earlier in 2013.

Condensate is moving from a truck unloading facility in Three Rivers to Magellan's Corpus Christi Terminal. From the Corpus Terminal, condensate can reach local petrochemical plants, as well as water borne export options.

This leg is just a portion of what is a $150 million project that includes 140 miles of 12-inch pipelines. The system connects with other Kinder Morgan pipelines in the area as well.

The next leg of the pipeline from Gardendale (near Cotulla) to Three Rivers is expected to be online in the third quarter of 2013. Initial capacity is planned at 100,000 b/d, but the system can be expanded to handle 150,000 b/d.

The pipeline was supported by long-term commitments from Talisman and Statoil.

Kinder Morgan - Copano Reach $5 Billion Deal

Copano Energy Assets Map

Kinder Morgan and Copano Energy have reached a $5 billion agreement whereby KMP will acquire Copano. The transaction prices Copano at a 23.5% premium to its closing prices on January 29, 2013. The combined company has over 80,000 miles of pipelines and more than 180 terminals. The deal is expected to close by the third quarter of 2012

Richard Kinder, CEO stated, "The footprint we now control has never been paralleled........I'm absolutely convinced US natural gas is the future of energy......everything points to infrastructure being the biggest hurdle to continued growth.....We're seeing increased use of US hydrocarbons in every portion of the economy."

Copano's assets are centered around the South Texas Eagle Ford, Fort Worth Basin Barnett Shale, Oklahoma's Woodford Shale & Mississippi Lime plays, and the Powder River Basin in Wyoming. The company has more than $1 billion in identified growth projects and Rich Kinder expects that number will grow once the assets are under KMP control. Copano operates:

• 6,900 miles of pipelines with 2.7 Bcf/d of throughput capacity
• 9 processing plants with 1 Bcf/d of capacity
• 315 mmcfd of treating capacity

Kinder Morgan Asset Map

Kinder Morgan will now own 100% of the two companies' Eagle Ford Gathering JV. Eagle Ford Gathering comprises approximately 400 miles of pipelines (including its capacity rights in certain KMP pipelines) with capacity to gather and process over 700,000 mmbtu/d.

Kinder plans to retain the "vast majority" of Copano's 415 employees and the company's Tulsa office.

KMP's Analyst day call will be streaming at kindermorgan.com until 2 pm CST.

Swift Energy Inks Gathering Deal - Reports Austin Chalk Results in LA

Swift Energy Eagle Ford Shale Acreage Map

Swift Energy signed a gathering agreement with Eagle Ford Gathering, LLC. Swift will have 40 mmcfd of firm capacity on the system in LaSalle County by the fourth quarter of 2012.

Eagle Ford Gathering, LLC is a 50/50 midstream partnership between Kinder Morgan (KMP) and Copano Energy (CPNO).

On a side note - the company reported a successful Austin Chalk well in Vernon Parish, LA. The well produced 744 b/d of oil and 7.2 mmcfd of natural gas.

Copano Energy Eagle Ford Shale Update - May 2012

Copano Energy Eagle Ford Midstream Map

Copano Energy provided an update on its Eagle Ford operations in May. Highlights include:

• Copano is investing $1 billion in organic projects
• Has committed volumes of ~1 Bcf/d with 10 year terms from producers
• Houston Central (200 mmcfd)cryogenic plant is performing better than expected
• Lean oil plant at Houston Central realizing lower recoveries than expected
• New 400 mmcfd cryogenic plant at Houston Central will improve margins further Q1 2013. Another 400 mmcfd expansion coming in 2014
• High NGL content in the Eagle Ford creates short-term constraints, but long-term opportunity

Other growth projects and notes

• DK Pipeline extension will reach into McMullen County by Q2 2013 ($120 million)
• Double Eagle Condensate Pipeline JV - Copano will spend $100 million on the 140 mile condensate gathering system. Building system in partnership with Magellan Midstream (100,000 b/d of capacity planned)

Find the full presentation at copanoenergy.com