Wastewater Facility in Jeopardy

March 22, 2016 Elizabeth Alford

DeWitt Residents Fight Wastewater Facility

A proposed wastewater treatment facility in the Eagle Ford is in jeopardy as DeWitt county residents push back.

Petro Waste Environmental is still awaiting permits from the Texas Railroad Commission that would allow them to build a solid waste disposal site in Nordheim,TX. But residents of the community have been fighting for three years to block the permitting process because the facility would be built directly over a natural gas pipeline.

In addition to concerns over issues of drainage, residents are also afraid of the potential dangers caused by increased truck traffic, including the shifting earth and fire.

Petro Waste Environmental CEO, George Wommack said that this type of construction over a pipeline is a normal occurrence and with the proper planning, there is no reason for concern.

“It’s a matter of planning and engineering and making sure there is sufficient soil between the pipeline and where there is truck traffic,” Wommack said. “We’ll conduct all kinds of engineering studies as the construction takes place with compaction requirements and other testing that’ll ensure the integrity around the pipeline.”

In December, the Railroad Commission of Texas issued Petro Waste their first permit to operate a non-hazardous oil and gas waste landfill in Howard County in the Permian Basin. The company is awaiting permits for DeWitt, Frio, McMullen, and Pecos counties.

Other waste companies are also looking to expand into the Eagle Ford. In January Milestone Environmental Services, LLC announced it had acquired an oilfield waste facility currently under construction near Smiley, in Gonzalez County, Texas through a newly-formed subsidiary with Intervale Capital.

The Eagle Ford Loses More Jobs

March 21, 2016 Elizabeth Alford

Chesapeake Cuts Budget for 2015 — More Texas Jobs Cuts

The announcement of more job cuts in the Eagle Ford last week highlight the sustained struggle that energy companies face.

Related: Devon Energy to Cut 1,000 Jobs

The Texas Workforce Commission reported last week that two companies that service Eagle Ford Shale will lay off 174 people.

CalFrac Well Services will be laying off 87 employees in May at its San Antonio facility, bringing the total number of company layoffs to more than 1,700 jobs since the end of 2014. The company has been hit hard by the prolonged low crude prices and in its year end report, announced a net loss for 2015 of $221.6 million.

Another company with has already given notice to 87 employees is the C&J Energy Services. The Houston-based company said the cuts will come from their facility in Robstown and come less than a month after the company laid off 78 workers at its facility in Pleasanton.

“C&J Energy Services Senior Vice President Billy Driver told BizJournal that, “The planned layoffs are being classified as permanent, although the company has hopes to rebuild its work crews wherever orders for services warrant additional staffing.”

Just last week, C&J Energy Services founder and CEO Joshua Comstock died unexpectedly in his sleep. The company named Randy McMullen to take his place.

Eagle Ford Rig Count Inches Up

March 19, 2016 Elizabeth Alford

The Eagle Ford Shale rig count increased by four, ending the week with 52 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, in the wake of the shale boom hundreds of roadways in South Texas are in disrepair and will likely cost communities hundreds of millions of dollars to fix.

A total of 476 oil and gas rigs were running across the United States this week, which is a drop of nine over last week. 89 were targeting natural gas (four less more than the previous week) and 387 were targeting oil in the U.S. (one more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)217 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 increased in the Eagle Ford fell by on to five this week as natural gas prices improved slightly, trading at $1.93/mmbtu, a $.11 increase from the previous week.

The Eagle Ford saw an increase in running oil rigs up this week to 45 with WTI oil prices ending the week at $39.64, an increase of $1.05 over last week. A total of 45 rigs are drilling horizontal wells, zero are drilling directional wells, and seven are vertical rigs.

Karnes County continues to lead the region in development with 13 running rigs. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Clayton Williams Stops Eagle Ford Drilling

Earthstone Reports ‘Decent’ Q4

Eagle Ford County Roads a Mess

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.

Abraxas: No Activity in the Eagle Ford

March 18, 2016 Elizabeth Alford

Chesapeake Released 2015 Q1 — Abraxas Petroleum Earnings Report

Abraxas Petroleum Corp. announced they will focus the remainder of 2016 on their Bakken assets while scouting opportunities to sell Texas properties.

Abraxas recorded a net loss of roughly $127 million for the full year 2015. Moving forward in 2016, the company plans to focus on their Bakken assets and they anticipate six gross well completions in the third quarter. Abraxas' net CAPEX for the region will be between $24 - 34 million.

In a recent earnings call, Abraxas' executives did not give any new information on what is happening in the Eagle Ford, but they are preparing to divest 5,227 net acres in the Texas counties of Ward and Reeves along with an additional 12,100 net surface acres in Pecos County.

“Abraxas is going to build on our past record to become better in 2016 and beyond despite of 64% decrease in capital expenditures and a substantial proved undeveloped reserve right down due to prices in 2015. We still increased our proved reserves by 2% to 43.2 million barrels and we replaced production 136%. We also grew production grew year-over-year 4%.”

— Bob Watson, Abraxas' President and CEO

In January, the leadership team of Abraxas Petroleum voluntarily cut their fees in a drastic measure to stay afloat.

The twelve months ended December 31, 2015 resulted in:

Production of 2.2 MMBoe (5,975 Boepd)
Revenue of $76.9 million inclusive of realized hedge settlements
Adjusted EBITDA(a) of $43.7 million inclusive of Raven Drilling
Adjusted discretionary cash flow(a) of $40.2 million inclusive of Raven Drilling
Net loss of $127.1 million, or $1.21 per share
Adjusted net loss(a), excluding certain non-cash items and inclusive of Raven Drilling of $6.0 million, or $0.06 per share (a) See reconciliation of non-GAAP financial measures below

Clayton Williams Stops Eagle Ford Drilling

March 16, 2016 Elizabeth Alford

Executives of Clayton Williams Energy Inc. (CWEI) were happy to see 2015 come to an end.

Related: Baytex Reports Strong Q4

In October 2014 as the oil slump was just beginning, Clayton Williams executives announced they would pull back activity in 2015. And during an earnings call last week, they confirmed that was indeed how the year played out.

Throughout 2015, the company limited their drilling and completion activities to combat the downturn and expect to reduce capital spending further in 2016.

“We’re ready to close the chapter on 2015. It was a tough time, it reminds me a lot of 1980s and I was in – I lived through the 1980s, I worked at Clayton Williams then and we made it. We made it through that time. We’re going to make it through this time.”

— Mel G. Riggs - President & Director

Eagle Ford Operations

CWEI speculated that they expect their 70,000 net acres in the Eagle Ford to achieve high shareholder value. Average daily oil production for 2015 was 3,037 Bbls compared to 2,529Bbls for 2014. The company also saw a production increase in natural gas from 464 (Mcf) in 2014 to 516 (Mcf) in 2015. The company is shifting it's focus to the Delaware Basin and would not speculate on what its spending will be for the Eagle Ford for the rest of the year.

Other 2015 Results

Oil and Gas Production of 15.8 MBOE/d
Adjusted Net Loss1 (non-GAAP) of $70.4 million
EBITDAX2 (non-GAAP) of $112.1 million
Production costs in 2015 were $87.6 million versus $105.3 million in 2014
G&A was down 34% compared to the previous year