Eagle Ford Couple Loses Claim in Texas Courts

Texas High Court Refuses to Hear Eagle Ford Case

Texas High Court Refuses to Hear Eagle Ford Case

The Texas Supreme Court has thrown out a three year old case brought by one Karnes County couple.

Related: Eagle Ford Family Wants Their Day in Court

Michal and Myra Cerny from Karnes County fought their legal battle all the way to Texas’ highest court last year. The couple claimed that oil and gas activity on their property had seriously reduced their quality of life by making them sick and damaging the foundation of their home.

On December 2nd, the justices denied the Cerny’s petition to hear the case and upheld the lower court’s ruling that the couple couldn’t prove their issues were tied to oil and gas activity.

In 2013, the Cernys filed suit against Marathon and Plains alleging that their negligent oilfield operations subjected them to toxic chemicals and noxious odors that worsened their existing health problems, caused new health problems, and damaged their property by creating sinkholes and damaging the home’s pier and beam foundation.
— TX 4th Court of Appeals

The original case was dismissed and their first appeal failed when the courts ruled that family didn’t meet the legal standards for nuisance and negligence claims. Now that the Supreme Court is refusing to review the case, the Cherny’s have no other recourse to gain financial restitution.

Some are concerned that the decision may have a broader impact on pending and future litigation where landowners claim health-related personal injury claims.

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Read more about Cherny v Marathon Oil Corp

Eagle Ford Rig Count Climbs to 52

Eagle Ford Operators Put Rigs Back Online

Eagle Ford Operators Put Rigs Back Online

The Eagle Ford Shale rig count continued its climb this wee, with our data showing 52 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news,  OPEC announced it will reduce oil production for the first time in eight years. This decision is great news for energy-producing regions in the United States including Texas and the Eagle Ford Shale Play. 

Read more: Eagle Ford to Gain From OPEC Production Decrease

A total of 623 oil and gas rigs were running across the United States this week, a gain of 27 over last week. 125 rigs targeted natural gas (six more than the previous week) and 498 were targeting oil in the U.S. (21 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 303 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Nine rigs in the Eagle Ford region targeted natural gas this week with the commodity gaining to $3.75/mmbtu.

43 Eagle Ford rigs were targeting oil with WTI oil prices dipping slightly to $51.50. 

A total of 46 rigs are drilling horizontal wells, zero are drilling directional wells and six are vertical.

Karnes County leads this week with 13 rigs in production. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

New Eagle Ford Refinery to Bring Jobs

Sanchez Production Partners Gain Eagle Ford Assets

Eagle Ford to Gain From OPEC Production Decrease

Eagle Ford Counties #1 in Oil & Gas

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Read more at bakerhughes.com

New Eagle Ford Refinery to Bring Jobs

A Woodlands-based company targets the Eagle Ford with plans to construct the first U.S. oil refinery in over forty years.

Related: More Eagle Ford LNG Headed Abroad | Eagle Ford Shale Play

The $500 million facility, currently under construction by Raven Petroleum, will process 50,000 barrels a day of light crude. The company plans to break ground on 200 acres in Duval County with an additional 632 acres adjacent to the complex that is available for co-development.

The refinery will bring almost 1,800 construction jobs to the local economy that has a population of only 12,000. It will also decrease the tax rate by 50%, according to Duval County Judge Ricardo “Rocky” Carrillo.

Raven has received positive support from local county officials and the Texas Governor’s Office regarding permitting and development of the project.
— Company Press Release

Refinery project details:

  • Located in Duval County, just outside of Laredo, Texas
  • Direct rail access to Mexico via the Kansas City Southern (KCS) rail network
  • Two pipelines bisect the property with adjacent highway transportation access
  • Access to ample feedstock from multiple Eagle Ford suppliers
  • Ideal position for distribution to newly opened Mexican markets
  • 50,000 barrel-per-day (bpd) crude oil refinery
  • Storage tank capacity of up to 4,000,000 barrels.
  • Capacity of 2 inbound and 2 outbound Unit trains per day
  • Rail terminal infrastructure with approx 20 miles of internal track
  • 200 acres with 6,000+ ft direct rail frontage on the KCS mainline
  • Additional 632 acres for co-development

Read more at ravenpetro.com

Sanchez Production Partners Gain Eagle Ford Assets

Sanchez Energy Closes on Eagle Ford Acquisitions

Sanchez Energy Closes on Eagle Ford Acquisitions

Sanchez Production Parters (SPP) and Sanchez Energy Corp have closed on two deals involving Eagle Ford assets valued at over $600 million.

Related: Sanchez Reports Excellent Third Quarter

In the first deal, SPP acquired a 50% interest in Carnero Processing, LLC from Sanchez Energy Corporation for $80 million, including $55.5 million in cash and assuming $24.5 million for capital commitments to Carnero Processing. Carnero Processing is currently constructing a cryogenic natural gas processing plant in La Salle County. The “Raptor Plant” will be connected to Sanchez Energy’s Catarina via the Carnero Gathering System.

The company also closed on its acquisition of producing oil and natural gas assets, paying $25.6 million in cash to Sanchez Energy at closing.

Having now closed the two transactions announced in October 2016, we have successfully executed and financed transactions with Sanchez Energy for total value of nearly $600 million,” said Gerry Willinger, Chief Executive Officer of the general partner of SPP. “In the process, we have demonstrated how our strategic relationship with Sanchez Energy can be leveraged to enable each company to better optimize its respective strategies, capital resources, and financial targets. We are excited to be further aligned with Sanchez Energy and its plans for development in South Texas, and look forward to capitalizing on additional opportunities to grow alongside this leading Eagle Ford operator over time.

These transactions are expected to add an average of 700 Boe/d of production in 2017.  The estimated proved reserves from the producing wellbores is approximately 2,136 MBoe, of which 73% is oil, 13% natural gas liquids, and 14% natural gas.

Sanchez Energy reported and excellent third quarter for 2016. The company is currently running three rigs in the Eagle Ford, with plans to drop to two rigs during the fourth quarter. Executives estimate the company has over 350 Upper Eagle Ford locations with returns in excess of 50%

Read more at sanchezproductionpartners.com

Eagle Ford to Gain From OPEC Production Decrease

OPEC

OPEC

OPEC announced it will reduce production and many are wondering what this means for this mean for the Eagle Ford.

Related: OPEC Decision Doesn’t Intimidate

For the first time in eight years, OPEC has agreed to reduce oil production, announcing last week that it will cut approximately 1.2 MMBOPD to 32.5 MMBOPD effective 1 January 2017.

The decision is great news for energy-producing regions in the United States including Texas and the Eagle Ford Shale Play. Texas has lost over 100,000 jobs since 2014 as crude pricing remained low, and this agreement should help create more jobs and reverse some of the stress of the last two years.

Analysts predict that this deal will remove 1.5 million barrels of oil per day from the global market, causing an increase in the price of crude oil, possibly moving closer to the $60/bbl range. Prices jumped immediately after the announcement, with Bloomberg reporting a per barrel price of $52.08 this morning.

One of the first things shale producers will likely do is to begin to attack their inventory of DUCs that have been waiting for prices to recover. There are currently 5,155 DUCs in the U.S., with one-quarter of them in the Eagle Ford, according to the Energy Information Administration.

During a press conference, OPEC responded to comments that this agreement will cause an increase in price that will benefit shale producers:

The idea is to take measures to get the market rebalanced. We are not saying the rebalance will be from just OPEC and non-OPEC key members, but producers from outside will react to the price, but we cannot see a threat from shale gas and shale oil producers, because they will look at how much it will cost them, and the affordability. They will do it without us interfering. We think this measure will help rebalance. There will be effects on expensive producers, not only shale oil, but others.

Details Include:

  • The OPEC deal was unanimous
  • The deal is initially for six-months deal, but OPEC could extend by another six months
  • The cuts will begin in January with cut OPEC production to 32.5 million barrels daily
  • Saudi Arabia is making the biggest cut, agreeing to reduce its production levels by nearly 500,000 barrels a day to about 10 million
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