More Texas Pipelines Needed

April 6, 2017 Elizabeth Alford

Texas Pipeline Map: Provided by Energy Information Administration

Over the last year, production in the Permian Basis has outstripped the Eagle Ford Shale and drillers who are flocking to the region may soon need additional pipeline capacity to move their product.

While crude prices have taken a toll on shale producers in most regions, Permian production has spiked over the past two year. In the Eagle Ford, oil production in the Eagle Ford peaked in March 2015 at 1.7 million barrels per day (mb/d), but has since fallen to just 1.1 mb/d today. In the Permian, production has risen by nearly 0.5 mb/d to nearly 2.3 mb/d.

Bloomberg estimates that Permian production could continue to rise to 2.65 mb/d by the end of the year, which is greater than the current pipeline capacity that can carry 2.54 mb/d.

“From the looks of it there could be several thousand barrels a day worth of midstream capacity shortages by the end of the year. The rate of growth in takeaway pipeline capacity is going to be where the bottleneck is, and that will choke access to the market for producers.””

— Mara Roberts, analyst at BMI Research

Several pipelines projects are on the horizon to help ease the burden.

Enterprise Products Partners has a pipeline under construction, which will add 450,000 bpd by next year.
The 468-mile Pecos Trail Pipeline, an intrastate natural gas system that will span from West Texas all the way down to Corpus Christi, Texas. The system will be able to transport 1.85 billion cubic feet per day.
The proposed EPIC pipeline will move 440,000 barrel a day from the Delaware and Midland basins in West Texas to Corpus Christi, Texas.

Texas pipeline facts (EIA):

Texas is the top ranked natural gas consuming State.
Intrastate pipelines in Texas account for 45,000 of the 58,600 miles of natural gas pipelines in the State.
The largest intrastate pipelines in Texas are Enterprise Texas Pipeline Company (8,750 miles) and the Energy Transfer Partners LP (8,800 miles).
The intrastate network in Texas has experienced significant growth over the past several years as a result of increased demand for pipeline capacity caused by the rapid development and expansion of natural gas production in the Barnett Shale Formation.
New pipelines have been built, and expansions to existing ones undertaken, to meet increased demand.

Paxton: Methane Rules Exceed Legal Authority

April 4, 2017 Elizabeth Alford

Texas joins other states to officially oppose methane rulings by the Bureau of Land Management.

Last week, Texas Attorney General Ken Paxton petitioned the court to intervene in the "Methane Waste Prevention Rule,” one of the last acts of the Obama administration. The ruling set tighter restrictions on flared, vented and leaked methane gas produced from oil and natural gas extraction.

“This is yet another case of gross federal overreach in which the Bureau of Land Management exceeded its legal authority, bypassing Congress to implement an unlawful rule on methane gas. The regulation has negligible environmental benefit and adds additional cost to both Texas and the oil and gas industry by creating more red tape.”

— Texas Attorney General, Ken Paxton

Paxton argues in the petition that the rulings duplicate law that is already on the Texas books and would cause undue delays and confusion.

The petition was granted by U.S. Magistrate Judge Kelly H. Rankin.

Other Texas officials have weighed in on the overreach of federal regulations into Texas. Last year, Railroad Commission Chairman David Porter and Commissioners Christi Craddick and Ryan Sitton wrote a letter to the EPA, warning against further federal overreach of the U.S. Environmental Protection Agency’s proposed rules on methane emissions for oil and gas operators. The letter highlighted the unnecessary cost to oil and gas operators that would likely stifle innovation and jobs in the industry.

The Eagle Ford Shale Rig Count on the Rise; Texas Rig Total Sits at 411

March 31, 2017 Elizabeth Alford

The Eagle Ford Shale rig count is still on the rise, with our data showing 86 rigs running across our coverage area by midday Friday.

In recent Eagle Ford News, the Texas Railroad Commission confirmed that Webb County produces more natural gas in Texas than any other county.

A total of 824 oil and gas rigs were running across the United States this week, an increase of 15 over than last week. 160 rigs targeted natural gas (five more than the previous week) and 662 were targeting oil in the U.S. (10 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 411 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

Eight rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $3.19/mmbtu.

78 Eagle Ford rigs were targeting oil with WTI oil prices increasing to $50.68

A total of 83 rigs are drilling horizontal wells, zero are drilling directional wells and three are vertical.

Karnes County leads this week with 20 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 Rig Count by County-March 31, 2017

Eagle Ford Shale News

Webb County: Natural Gas King of Texas

Penn Virginia Spending 90% in the Eagle Ford

Sanchez Gains Eagle Ford Assets for $2.1 Billion

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.

Anadarko Cuts 60 Jobs

March 29, 2017 Elizabeth Alford

Anadarko lays off 60 workers after selling Eagle Ford assets.

Anadarko Petroleum Corporation reported to the Texas Workforce Commission in January that layoffs were likely after a $2.3 billion sale of 318,000 gross acres in Dimmit and Webb counties. At the time, the company said up to 85 jobs might be affected and on March 23rd they sent pink slips to 60, according to Fuelfix.

Sanchez Energy Corporation and Blackstone Group LP. purchased the Eagle Ford assets, with current production of approximately 67,000 Boe/d.

“An unspecified number of Anadarko employees went to work for Sanchez. But about 60 employees who supported the project, mostly from Anadarko’s headquarters in The Woodlands, were not retained by Sanchez. The employees worked in a variety of areas including operations and accounting.”

— Fuelfix.com

Webb County: Natural Gas King of Texas

March 27, 2017 Elizabeth Alford

Webb County, in the heart of the Eagle Ford, produces more natural gas in Texas than any other county.

In a state known for its oil and gas activity, the Eagle Ford Shale's Webb County could definitely be dubbed the 'King of Natural Gas'. The Texas Railroad Commission, the state's regulatory agency, reports monthly on all production activity in the state and has ranked Web County #1 in natural gas production for several years in a row.

Production peaked in April, with the RRC reporting total gas from Webb County at 6,454,727 (mcf). Tarrant County has remained second throughout the year, but trailed behind Webb between 12,000,00 - 24,000,000 (mcf)every month.