Eagle Ford Counties Win Royalties

be safe. be smart.
be safe. be smart.

New legislation allows Eagle Ford counties to keep some of its mineral wealth, which is good news for the failing road system.

Governor Greg Abbott recently signed SB 951, overturning an old provision that stripped counties of the proceeds from the minerals that ran under their roads. Since 1960, the state has received all mineral royalties, even though they do not maintain county roads.

Over a 40 month period, the money for drilling under roads in Karnes, DeWitt and Gonzales counties generated $16 million for the state. The new law allows the counties to keep this money, which will be vital to maintaining their road systems that have been significantly impacted by the shale boom.

Eagle Ford Roads Impacted by Higher Traffic & Inadequate Funding

Eagle Ford production has been great for local economies, but has taken its toll on their roadways. Small gravel roads originally built for passenger cars now host huge rigs that travel at high speeds and often create deep, hazardous craters. Some road edges are shredded and the pavement can unexpectedly drop off half a foot.

The bill was filed by State Sen. Carlos Uresti who also worked last session to gain an additional $225 million to counties for road repair.

For the first time that anyone can remember in decades, the state funded the county roads. That’s always been a county function: counties, you’re on your own. But again, given all the activity, I was able to get my colleagues to pass this bill,” Uresti said, adding that more was needed.
— Senator Uresti

Pipeline Inspectors May Soon Carry Guns

S&B Infrastructure Projects
Eagle Ford Roadways Used for Criminal

The drug war is now affecting parts of the Eagle Ford as pipeline inspectors express concern for their safety.

As energy companies moved into the Eagle Ford, they have cleared brush and build dirt roads in order to make way for pipelines to carry their product.

This development has had the unintended consequence of providing potential pathways for those smuggling drugs and illegal immigrants, and officials now fear that criminals may come into contact with energy company employees, regulators and landowners.

The issue of the drug cartels exploiting the Eagle Ford Shale’s network of private roads has been a concern since 2012.

Related: Drug Smugglers Using Location Roads to Bypass Border Patrol

The federal government has been ineffective in preventing illegal activity along the border and with the unprecedented amount of oil and gas activity in the Eagle Ford Shale in recent years, Commission inspectors in South Texas have voiced concerns about their safety. It is the Railroad Commission’s duty to protect the health and safety of all Texans – and as Railroad Commissioners, this responsibility extends to ensuring that our staff is protected while doing this important work.
— Texas Railroad Commission Chairman, David Porter

Porter has implemented policy changes to keep inspectors safe including:

  • Ensuring that RRC staff and inspectors who want to carry firearms for self-protection on duty have the opportunity to obtain their concealed handgun license in a timely manner.
  • Requiring inspectors in areas of concern to use the “buddy system” to ensure they are not alone in potentially dangerous areas.
  • Purchasing cell phone boosters for inspector vehicles in remote areas of South Texas that are close to the border and have limited access to mobile communications.

For more  information, go to rrc.state.tx

Eagle Ford Rig Count Up to 119

Eagle Ford Rig Count
Eagle Ford Rigs Increase

The Eagle Ford Shale rig count increased this week to 119 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the Energy Information Administration reported last week that Eagle Ford Shale gas production increased by 349% in the past eight years, even as rig counts plummeted.

Read more: Eagle Ford Natural Gas up 349%

The U.S. rig count increased slightly, ending with 859 rigs running by midday Friay.  A total of 228 rigs were targeting natural gas (five more the previous week) and 628 were targeting oil in the U.S. (three less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)361 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 near the bottom of this article.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford stayed flat at 26 this week and natural gas prices traded at $2.77/mmbtu, an decrease of  $.05 from the previous week.

The oil rig count increased by two to 91 with WTI oil prices remaining stable at $59.63, an $.02 increase. A total of 109 rigs are drilling horizontal wells, one rig are drilling directional wells, and seven are vertical rigs. Karnes leads development this week and is running 20 rigs, while LaSalle (19) and Webb (16) follow closely. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by Count

Eagle Ford Shale News

Twin Eagle Expands Eagle Ford Operations

Japan Eyes Eagle Ford Natural Gas

Birthday of 2014 Oil Crash

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

Twin Eagle Expands Eagle Ford Operations

Rosetta-Noble Merger
Twin Eagle Acquires StarMex Big Wells

Twin Eagle Resource Management announced this week it will acquire another 42 miles of pipeline in the Eagle Ford.

Related: Eagle Ford Shale Midstream Sold

Houston-based Twin Eagle says the deal gives them 100 percent interest in StarMex Big Wells, LLC,  a crude oil gathering system pipeline that connects to the major long-haul pipelines in the Gardendale area.

The acquisition of StarMex Big Wells is exciting for the Twin Eagle brand as we continue to diversify our logistics and midstream offerings to our clients,” said Griff Jones, Twin Eagle’s chief executive officer. “We are looking forward to working with producers in the area to develop valuable gathering solutions to move their crude oil.

The company's press release states that the pipeline system has capacity of 35,000 bopd and is backed by long-term, fee-based contracts with existing customers that are committed to ship approximately 24,000 bopd.

StarMex Big Wells will be renamed Twin Eagle Gardendale Pipeline, LLC.

While many companies have curbed spending during the downturn, others have taken advantage of new opportunities to expand their operations:

  • Enterprise Products Partners (EPD) will acquire Eagle Ford Shale (EFS) Midstream for a total price of $2.15 billion. Read more
  • Repsol completed its acquisition of Talisman Energy last month and became one of the largest companies in the energy sector worldwide. Read more
  • Houston -based EP Energy plans to expand its presence in the Eagle Ford by adding new training, office and warehouse space to its operations in Dilley. Read more

Read the press release at twineagle.com

Japan Eyes Eagle Ford Natural Gas

Japan Eyes Eagle Ford Natural Gas
Japan Eyes Eagle Ford Natural Gas

Natural gas from the Eagle Ford Shale may soon be making its way to Japan.

A delegation from the Consulate General of Japan is in Texas this week touring facilities in Freeport, Houston, Moulton and San Antonio as they look to the Eagle Ford as a potential source of much needed natural gas.

Related: More Pipelines Cross Texas-Mexico Border

In 2011, Japan suffered a devastating earthquake that wrecked a great deal of its energy infrastructure, which centered on nuclear power. None of Japan’s nuclear reactors reactors have reopened since the quake and officials have turned to natural gas as a way to to generate electricity as an alternative to nuclear power.

While this seems like a win-win for all sides there are some serious administrative hurdles to getting Texas gas to Japan.

Japan and the United States do not currently have a free trade agreement, which means that natural gas producers in Texas need to obtain an extra permit from the U.S. Department of Energy before they can ship natural gas to Japan.
— Former Japanese Ambassador, Yasuo Saito

Many are looking to the Trans-Pacific Partnership to ease the burden and make trade possible. This will be important as our domestic production continues to outpace our demand. EIA analysts predict that America will transition from a net importer of natural gas to a net exporter by 2017 as we increase domestic production, which will reduce our demand for gas imports from Canada and support growth in exports to Mexico, Asia and Europe.