Producers Defend Fracking Practices

RCC Studies Texas Quakes

XTO and Enervest were summoned to Austin last week to try and persuade the Texas Railroad Commission that their operations are not to blame for recent earthquakes in North Dallas.

Related: Texas Earthquakes: The Verdict is Still Out

This unusual request was a result of a highly-publicized and debated study conducted by SMU researchers that concluded two specific wastewater injection wells are likely the cause of a rare string of earthquakes over the last few years (more here).  Though the public seems convinced of this causal link, Railroad Commissioner Ryan Sitton said publicly he is 'unconvinced'.

XTO, a subsidiary of ExxonMobile, presented mounds of evidence to defend their fracking practices including more than 30 exhibits, dozens of slides, and three expert witnesses. The company argued that the unusual seismic activity was a natural occurrence and in hopes that the RRC from shutting down their wells.

“The earth has been moving continuously over time, and that movement is the result of natural tectonic forces far away but that express themselves right here.”

— Tim George, Attorney for XTO

This is the first time the commission has required a company to prove it’s not to blame for earthquakes. Recent policy changes now allow the agency to revoke permits if wells are linked to earthquakes.

Enervest is expected to put on its case today and tomorrow.

You can watch the hearing at rrc.com

EVEP & EnerVest Agree to Sell Certain Eagle Ford Assets

EVEP/EnerVest Eagle Ford Acreage Map

Houston-based EV Energy Partners (EVEP) and Enervest, Ltd. are selling certain deep rights in the Eagle Ford formation in Burleson, Brazos and Grimes Counties for $218-million. EVEP, a master limited partnership of which EnerVest is the controlling member of the general partner, will net $30-million from the deal. The buyer was not disclosed.

EVEP officials confirmed all non-Eagle Ford formation rights, including the Austin Chalk formation and corresponding production, will be retained for both EVEP and EnerVest. The transaction is expected to close by October 15th.

“With the development of the East Texas Eagle Ford under our Austin Chalk acreage and the rapid build-up of drilling rigs and capital requirements, we decided to capitalize on the opportunity and have entered into an agreement to sell our Eagle Ford formation rights in three of the counties where there has been significant activity to date. We plan to redeploy the proceeds in acquiring longer-life, high PDP content reserves.”

— EVEP CEO, Mark Houser

EVEP's remaining position in the East Texas Eagle Ford covers portions of Lee, Fayette and Washington Counties. Houser indicated in EVEP's second-quarter report that the company will retain this acreage until more drilling and production has taken place to further exploit its potential.

Read more at evenergypartners.com

GE - Vess Oil Acquire Woodbine & Eagle Ford Acreage From Enervest - $108 Million

Vess Oil Operations Map

GE and Vess Oil have partnered to acquire 13,000 net acres in Brazos, Grimes, and Madison counties from EnerVest for $108 million.

The acreage is producing from the Woodbine and prospective for the Eagle Ford Shale.

This is the third partnership GE Energy Financial Services and Vess Oil have entered. Previous partnerships have acquired reserves in Brazos County, TX, and Kansas. A separate Vess Oil affiliate also operates Woodbine acreage in the Kurten Field adjacent to the assets acquired here.

“I am eager to launch our program and look forward to expansion opportunities predicated on demonstrable results.”

— Ronnie Nutt, COO of Vess Oil

Read the full release at businesswire.com

Chesapeake's Eagle Ford Midstream & Gathering Being Sold to Bridge Funding Gap

Permian Basin Map

Chesapeake Energy plans to sell Eagle Ford midstream & gathering assets as part of a larger deal with Global Infrastructure Partners for $2.7 billion. The bulk of the assets included in the deal are located in the Eagle Ford, Haynesville Shale, Utica Shale, and Niobrara Shale in the Powder River Basin of Wyoming. The company is also selling oil gathering assets in combination with other Mid-Continent assets for proceeds of $300 million. The $3 billion midstream deal was one of several divestitures announced earlier in the week that also included the sale of Permian properties for $3.3 billion. The company has planned $13-14 billion in asset sales in 2012 and announced $6.9 billion in sales so far in September 2012. 

The assets sold in the third quarter included most of the company's Permian properties, almost all of the company's midstream assets, and non-core acreage in the Utica Shale. Permian properties were sold in three separate transactions with Shell, Chevron, and EnerVest. Midstream assets are being sold to Global Infrastructure Partners and oil gathering assets are being sold to an undisclosed buyer.

Read more in the chk press release.

Apache - EnerVest Eagle Ford Exploration Agreement

Apache Corp enters the US shale gas fold by reaching an agreement with Enervest to explore deep rights on 400,000 acres in Texas. Apache plans to taget the Eagle Ford Shale across much of the area where Enervest produces from the Austin Chalk. Financial consideration was not disclosed.

"Apache Corporation (NYSE, Nasdaq: APA) announced today that it has signed a multi-year agreement with EV Energy Partners, L.P. (Nasdaq: EVEP) and institutional partnerships managed by EnerVest, Ltd., to explore for oil and gas in deeper formations across 400,000 acres in Central and East Texas."

"Apache agreed to explore for new reserves below the base of the Austin Chalk formation and will be operator. EVEP and EnerVest will contribute the acreage."

" 'This is an excellent opportunity for Apache to explore substantial onshore U.S. acreage,' said G. Steven Farris, Apache's president and chief executive officer. 'We have demonstrated that access to acreage can become opportunities to increase production and reserves.' "

Read the full news release at apachecorp.com