Abraxas' Leadership Team Cuts Pay

January 26, 2016 Elizabeth Alford

Chesapeake Cuts Budget for 2015 — Abraxas Leadership Team Takes Pay Cut

The leadership team of Abraxas Petroleum is following the example of their CEO by voluntarily cutting their fees in a drastic measure to stay afloat.

Related: Abraxas Chief Slashes Salary

In a Securities and Exchange Commission filing this week, the executive officers of Abraxas announced that they will take a voluntary reduction in salary of 20%, effective February 1, 2016. Also taking cuts will be Abraxas employees who meet certain salary thresholds and the Board of Directors, who have agreed to take a 20% reduction in their fees.

In September, 2015, Abraxas' president and CEO, Robert Watson voluntarily cut his salary by 20 percent due to stressful market conditions. This was in the middle of a rough quarter where Abraxas posted a net loss of $52.4 million and the company’s production fell to 552,000 barrels of oil equivalent from 645,000 barrels.

Things changed drastically since 2014, when the company reported its best year on record and compensated Robert Watson over $900,000.

2016 has gotten off to a rough start as the Eagle Ford rig count continued its decline, ending last week with only 74 rigs running across the area. Analysts are predicting that the Eagle Ford will lead the pack for huge losses in early 2016.

Abraxas currently operates on ~10,891 net Eagle Ford acres in Atascosa, McMullen, DeWitt and Lavaca counties.

Access the SEC filing here

Eagle Ford Oil Thief Behind Bars

January 25, 2016 Elizabeth Alford

Chesapeake Before Texas High Court — Texas oil theft

One Eagle Ford oil thief is now behind bars and two of his buddies are soon to follow.

Last Wednesday, United States District Judge Alia Moses sentenced Juan Martin Bernal of Eagle Pass to 21 months in federal prison for his role in stealing $1.4 million in Eagle Ford Shale oil. Bernal was one of three defendants who pleaded guilty to one count of theft from an interstate shipment.

As part of his sentence, Bernal will also be required to pay a monetary judgment of $150,000 and will be placed on supervised release for a period of three years after completing his prison term.

Last year, Bernal and two co-defendants, 26-year-old Carlos Samuel Pena of Del Rio and 38-year-old Victor Manuel Guerra, Jr., the owner of Las Lomas Vacuum Services and AVG Vacuum Services in Laredo, pleaded guilty to one count of theft from an interstate shipment.

Bernal and two co-defendants--26–year-old Carlos Samuel Pena of Del Rio and 38-year-old Victor Manuel Guerra, Jr., admitted that between January 2011 and August 2014, they devised a scheme to steal oil from Newfield Exploration Company, and Anadarko Petroleum Corporation.

Guerra owned Las Lomas Vacuum Services and AVG Vacuum Services in Laredo and the trio used his wastewater removal trucks to transport the stolen oil. The oil was transported to Guerra’s property where he would sell the stolen product to third-party buyers who paid for the oil by wire transfer.

Guerra and Pena face up to ten years in federal prison. Guerra’s sentencing is April 25 and Pena’s is June 20. Both are scheduled to appear in Del Rio before Moses.

The case relied on an army of local, state and federal officials who were involved in the investigation including the FBI, the IRS Service Criminal Investigation, the Texas Attorney General’s Special Investigations Unit, the Bexar County District Attorney’s Office, the Texas Department of Public Safety, the Texas Rangers, the Dimmit County Sheriff’s Office and the Texas Railroad Commission.

In December,Texas lawmakers met in Austin to discuss the growing problem of oil theft in the Texas oil patch and to craft a bill that would increase the penalties for the crime. This is likely to be one of the top energy issues for the next legislative session in 2017, as lawmakers aim to send Abbott an anti-theft bill he can stomach.

“House Speaker Joe Straus asked lawmakers to “Examine whether current statutes are adequate for the successful prosecution of oilfield theft. Consider the potential economic impact of increasing penalties for oil and gas theft and make recommendations establishing an effective law enforcement response.”

Eagle Ford Rig Count Drops to 74

January 23, 2016 Elizabeth Alford

The Eagle Ford Shale rig count declined by four this week ending with 74 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the Energy Information Administration (EIA) reported that in 2017, natural gas exports will surpass imports for the first time since 1955. With hundreds of miles of natural gas pipelines heading from the Eagle Ford and Permian Basin to the Gulf Coast, the liquefied natural gas industry is poised to deliver the majority of those exports.

A total of 637 oil and gas rigs were running across the United States this week. 127 were targeting natural gas (eight less than the previous week) and 510 were targeting oil in the U.S. (five less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)294 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

Natural gas rigs in the Eagle Ford are at two this week as natural gas prices dipped, trading at $2.14/mmbtu, a $.04 increase from the previous week.

The Eagle Ford oil rig count fell to 72 with WTI oil prices ending the week at $32.19, an increase of $2.77. A total of 72 rigs are drilling horizontal wells, zero are drilling directional wells, and six are vertical rigs. Karnes County leads the region in development with 18 rigs this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Eagle Ford Counties Lead Production

Iranian Oil and Crude Prices

BHP Writes Down Billions

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.

Eagle Ford Counties Lead Production

January 21, 2016 Elizabeth Alford

Eagle Ford Drilling Permits: January 2016

Eagle Ford Counties still rank highest in Texas production, according to the Texas Railroad Commission.

Looking to the future, the U.S. Energy Information Administration (EIA) predicted that volumes from the seven major shale regions in the U.S. will drop by 116,000 barrels a day in February with the Eagle Ford having the biggest losses. That’s more oil than OPEC’s Ecuador or Libya produced last year on average.

Today, the Texas Railroad Commission (RRC) released production rates for December 2015 showing that, while production is indeed down, the Eagle Ford counties producing more in all three categories.

11/2014

11/2015

Total 2014

Total 2015

Oil (bbls)

86,464,573

70,969,209

975,786,334

916,324,950

Gas (mcf)

719,146,191

596,523,14

8,640,146,433

7,601,909,862

Eagle Ford's Karnes County is still in the number one spot for the greatest production of crude in the state, pumping out 6,052,467 (BBLS) in November with LaSalle falling second with 4,517,919 barrels. For natural gas, Webb County is on top with the RRC reporting they produced 54,004,171 MCF in November. And for condensates, the top four counties were all from the Eagle Ford:

DIMMIT

2,075,906

WEBB

1,312,117

KARNES

1,133,619

DEWITT

1,045,196

In December the RRC issued a total of 727 original drilling permits compared to 1,506 in December 2014. The breakdown of well types for those permits issued December 2015 included 159 oil, 42 gas, 440 oil or gas, 54 injection, two service and 30 other permits. 87 of those permits were issued to producers in the Eagle Ford region of the state.

For more information go to rrc.texas.gov

Natural Gas Will be a Boom for Eagle Ford Companies

January 20, 2016 Elizabeth Alford

Japan Eyes Eagle Ford Natural Gas — Eagle Ford Companies to Export Natural Gas

Eagle Ford midstream companies looking to prosper as natural gas exports overtake imports over the next 16 months.

In its latest, Short Term Energy Outlook, the Energy Information Administration (EIA) reported that in 2017, natural gas exports will surpass imports for the first time since 1955. With hundreds of miles of natural gas pipelines heading from the Eagle Ford and Permian Basin to the Gulf Coast, the liquefied natural gas industry is poised to deliver the majority of those exports.

“Natural gas working inventories were 3,643 billion cubic feet (Bcf) on January 1, which was 17% higher than during the same week last year and 15% higher than the previous five-year average (2011-15) for that week. EIA forecasts that inventories will end the winter heating season (March 31) at 2,043 Bcf, which would be 38% above the level at the same time last year. Forecast Henry Hub spot prices average $2.65/million British thermal units (MMBtu) in 2016 and $3.22/MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.”

— EIA

With the current forecast for natural gas, the San Antonio Biz Journal recently highlighted five Eagle Ford companies that are positioned to take advantage of these markets in 2016.

Howard Energy Partners: With acreage in Webb County, Howard plans to build a 200-mile pipeline to deliver 600 million cubic feet of natural gas per day to Mexico
Lewis Energy: A top producer with positions inLa Salle, Webb and Dimmit Counties.
Energy Transfer Partners: ETP already has natural gas export capabilities in Webb County and the Rio Grande Valley.
Sanchez Energy: With tens of thousands of acres in the natural gas-rich lands of La Salle, Dimmit and Webb Counties, Sanchez entered a joint venture worth$115 million to bridge connections to Mexico.
Flint Hills Resources: Has petitioned the federal government to ship LNG oversees.