Does Eagle Ford Drilling Add to Ozone?

July 21, 2015 Elizabeth Alford

NOAA Studies Eagle Ford Emissions — Does Eagle Ford Drilling Add to Ozone?

The Alamo Area Council of Governments will hold an executive meeting on Wednesday to discuss ozone levels in South Texas, including what whether drilling in the Eagle Ford Shale plays a role.

The AACOG is responsible for planning, information, and coordination activities for the region’s air quality that includes some of the top producing counties in the Eagle Ford.

The Council is concerned that the region historically has trouble staying within the federal standards for ozone this time of year and is proposing that private citizens get involved.

“There are a number of things we all can do to help our air quality. We’re basically asking people to limit outside activities that involve use of fuel.”

— Brenda Williams, AACOG’s Interim Director of Natural Resources

Some of the suggestions for people to reduce ground-level ozone are:

Ride a bus, bicycle or carpool instead of driving
Avoid drive-through lanes
Take a sack lunch to work or walk to lunch
Drive at moderate speeds to limit car exhausts

Meeting Details

July 22nd at 8:30am AACOG Al J. Notzon III Board Roo 8700 Tesoro Drive Suite 100 San Antonio, TX 78217

Will Iranian Oil Be Bad for Eagle Ford?

July 20, 2015 Elizabeth Alford

Texas Job Growth Slows — Oil Prices Predicted to Fall

Last week, the U.S. reached an historic agreement with Iran that will include lifting economic sanctions and allow the oil-rich nation to sell its oil once again. This news has analysts and energy executives worried about the impact on the global oil markets and the Eagle Ford Shale specifically.

Clearly this is bad timing. Since crude prices bottomed out in November, many producers have struggled to stay afloat while waiting for things to stabilize. If Iran floods the market with its crude as expected, prices will continue to fluctuate and will likely decline. Some analysts predict a drop in the price of WTI to as low as $40 a barrel.

This price point will be difficult for most producers to withstand for the long term, but many have been able to stay the course and gain strength by slashing costs associated with drilling through greater efficiencies and supplier reductions. Eagle Ford Economist Tom Tunstall of UTSA believes prices will definitely fall, but the efficiencies of the unconventional drilling will allow for smart Eagle Ford producers to remain profitable.

Related: Birthday of 2014 Oil Crash

Bloomberg’s Mark Barton doesn’t think that there will be an immediate impact and believes that it will take 6-12 months for Iran to even begin moving towards production. He goes on to say that Bloomberg is predicts $62 a barrel in the fourth quarter. See Barton's full comments in the video below:

Eagle Ford Rig Count Falls to 111

July 17, 2015 Elizabeth Alford

The Eagle Ford Shale rig count fell this week to 111 rigs running across our coverage area by midday Thursday.

In recent Eagle Ford news, researchers from the University of Austin released a new report that shows water usage in the Eagle Ford has expanded exponentially over the last five years thanks to fracking.

The U.S. rig count decreased by six, ending with 857 rigs running by midday Friday. A total of 218 rigs were targeting natural gas (one more than the previous week) and 638 were targeting oil in the U.S. (seven less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)366 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 remained at 25 this week and natural gas prices traded at $2.88/mmbtu, an $.11 increase from the previous week.

The oil rig count fell by four to 86 as WTI oil prices dropped to $50.85, a decrease of $1.89. A total of 101 rigs are drilling horizontal wells, zero are drilling directional wells, and 10 are vertical rigs. Karnes continues to lead development this week running 19 rigs, with DeWitt (15) and Webb (15) following closely. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Sabine Files Chapter 11

Frac Sand Shipment Largest on Record

Eagle Ford Company Beats Giant

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

Sabine Files Chapter 11

July 16, 2015 Elizabeth Alford

Chesapeake Cuts Budget for 2015 — Sabine Energy Files Bankruptcy

Sabine Oil & Gas Corp. became the largest U.S. oil producer to file for Chapter 11 bankruptcy protection this week, making it the sixth producer to take this action since the first of the year.

This decision follows months of speculation as Sabine struggled to pay creditors.

Since the decline in oil prices, there have been mergers, acquisitions and layoffs, but not as many bankruptcies as expected. But some analysts warn that this is just the tip of the iceberg and are forecasting more bankruptcies later in the year.

“Operations have been significantly impacted by the recent and dramatic decline in oil prices, the continued low prices of natural gas, and general uncertainty in the energy market. Sabine continues to evaluate and discuss alternatives with its stakeholders and believes that its in-court financial restructuring will position Sabine for profitability and long-term success.”

— Sabine

Other U.S producers who have filed bankruptcy include American Eagle Energy, Quicksilver Resources, BPZ Resources, WBH Energy and Walter Energy.

In May, Sabine reported first quarter increase of 116% for oil production over the same time last year as well as completing 15 wells across Texas. In the Eagle Ford, the company completed two wells in the Shiner Area in northern DeWitt County and southern Lavaca County which together averaged an IP30 of over 1,300 BOEPD, with 39% oil and 70% liquids.

Frac Sand Shipment Largest on Record

July 15, 2015 Elizabeth Alford

Speed Limits For Crude by Rail — Record Frac Sand Transport

Three Eagle Ford Companies have broken a national oil industry record by moving a massive amount of frac sand by rail.

Unimin Energy Solutions, Union Pacific Railroad and Twin Eagle Sand Logistics moved 14,000 tons of frac sand on July 4th weekend. The 140 cars measured 6,200 feet long and were powered by four diesel engines. The shipment was certified by Union Pacific as the largest single frac sand rail delivery in the United States.

This event is significant because it shows the continued improvements in all aspects of the oil and gas industry, including supply chain efficiency.

Twin Eagle Senior Vice President Jason Jennaro told the San Antonio Business Journal that it is a challenging market but the number of sand unit trains that have landed at the company's terminals have doubled or tripled so far in 2015.

“We believe this is emblematic of oil companies’ continued drive towards supply-chain efficiency. Further, we see this trend continuing next year into what is likely to be a more normalized market environment,” Jennaro said.”

Getting the sand to its final destination is another logistics feat. Company officials said it takes four to five 18-wheelers at least 94 truck trips to haul enough sand to a drilling site.