Kinder Morgan: Eagle Ford Production Down 28%

May 25, 2016 Elizabeth Alford

**Kinder Morgan Releases First Quarter Earnings**

Kinder Morgan has lowered its 2016 guidance due to a 28% decline in production from their Eagle Ford shale assets.

In an earnings call last week, Kinder Morgan chief executive Steve Kean reported a good first quarter with cash flows in excess of $1.2 billion plus a reduction in their growth capital backlog from $18.2 billion at the end of the fourth quarter 2015 to $14.1.

Kinder Morgan’s combined oil production across all of our fields was down 7% in the first quarter, averaging 56.4 MBbl/d, down 6 percent from 59.8 MBbl/d for the same period in 2015.

The Houston-based company lowered its overall 2016 earnings guidance by 3%, attributing over half of that to the declines in the Eagle Ford volumes.

“While Eagle Ford volumes declined overall, and we are projecting declines on our assets going forward, we have seen volumes grow on our KMCC (Kinder Morgan Crude and Condensate) pipeline,” Kean said. The 300,000 b/d line, which carries Eagle Ford liquids to the Gulf coast, is starting to see volumes slow. “We think we’ve just started to see some flattening on that pipeline, but what we’ve done on this pipe is essentially grow our market share.”

EnerVest Grabs Eagle Ford Assets for $1.3 Billion

May 24, 2016 Elizabeth Alford

EnerVest Ltd. increases their Eagle Ford Shale assets in new deals worth $1.3 billion.

In a recent press release, Houston-based EnerVest Ltd, announced they had completed the last in a three-part purchase on Eagle Ford assets in a concentrated part of Karnes County.

In the latest deal, expected to close in June, EnerVest will acquire 7,056 net acres from BlackBrush Oil and Gas LP. The assets include 341 drilling locations and produce 5,170 barrels of oil equivalent per day.

Since 2015, EnerVest has been gobbling up acres and assets in the Eagle Ford including:

April 29, 2016
4,198 net acres from affiliates of San Antonio-based GulfTex
256 drilling locations
Produce 8,568 barrels of oil equivalent per day
Fall 2015
$125 million purchase of Houston-based Alta Mesa Holdings LP’s
1,760 net acres with 278 drilling locations and 7.8 million barrels of oil equivalent of reserves
Producing 2,200 barrels of oil equivalent per day

“This is a great time in the commodity price cycle to buy oil assets, especially in the core of one of the hottest plays in the U.S.,” John Walker, EnerVest CEO, said in a statement. “With stacked reservoirs of the Lower Eagle Ford, the Upper Eagle Ford and the Austin Chalk, we see plenty of development opportunities at today’s prices.

In June, Enervest executives were summoned to Austin to try and persuade the Texas Railroad Commission that their operations are not to blame for recent earthquakes in North Dallas. The company was eventually cleared of any wrong doing in relation to a link between fracking and the Dallas quakes.

Read the press release here

Earthstone Energy Looks to Resume Eagle Ford Activity

May 23, 2016 Elizabeth Alford

**Earthstone Energy resumes Eagle Ford activity**

Earthstone Energy executives express optimism that they can increase their Eagle Ford activity this summer as crude prices continue to move higher.

Related: Earthstone Reports ‘Decent’ Q4

The Woodlands-based company announced a challenging first quarter that included a 7% decrease in production. The company made crucial due to decisions to defer certain capital expenditures throughout the quarter due to weaknesses brought on by crude prices.

“This decrease was due to lack of completion activity on the 12 Eagle Ford wells that we have drilled, but are waiting on completion along with natural declines on well drilled in 2015 and the fact that we chose to allow flowing wells to continue to produce at lower rates as a result of postponing the capital expenditures for installing artificial lift on those flowing wells.”

— Robert Anderson – Executive Vice President

2016 Q1 highlights:

Average daily production of 3,576 Boepd
Total revenue of $8.9 million, which includes the effects of realized hedges
Lease operating expense decreased 30% relative to the first quarter of 2015
Adjusted EBITDAX(1) of $1.9 million

Eagle Ford Operations

Approximately 60% of Earthstone’s operated Eagle Ford acreage is held by production. The Company has 12 gross Eagle Ford locations waiting on completion from four units.

For the rest of 2016, the company has allotted $4.0 million to spend on the Eagle Ford.

“With price improvement, we believe we can ramp up production with our frac inventory while re-establishing drilling activities. We will likely complete our four-well Boggs Unit in Karnes County this summer.”

Last week, Earthstone announced it had completed their acquisition of Lynden Energy Corp anticipating production of approximately 4,900 barrels of oil equivalent per day.

Penn Virginia Corp. Files Chapter 11

May 19, 2016 Elizabeth Alford

Chesapeake Before Texas High Court — Penn Virginia Files for Chapter 11

Eagle Ford producer, Penn Virginia Corporation has filed for chapter 11 protection.

On May 12th, Penn Virginia Corporation announced that it had filed voluntary petitions for relief under chapter 11 in order to reduce the Company's long-term debt by more than $1 billion. As part of the filing, the company asked the Court to allow them to continue its ongoing employee compensation and benefit programs.

“Like many other exploration and production companies, Penn Virginia has been significantly affected by the recent and continued dramatic decline in oil and natural gas prices. We believe using the chapter 11 process is the most efficient way to achieve our financial objectives and deleverage the Company’s balance sheet,”

— CEO, Mr. Cloues

Eagle Ford Operations

Penn Virginia's primary focus is on its operations in the Eagle Ford Shale holding approximately 100,000 net acres in Gonzales and Lavaca Counties. The company did not release a 2015 Q4 statement, but their website states that they planned to utilize one operated drilling rig in the Eagle Ford Shale for the remainder of 2016.

Join the Discussion: How Will Oil Company Bankruptcy Affect Me As A Royalty Owner

In January, Penn Virginia suspended trading on the NYSE and began delisting procedures.

Oil and gas bankruptcies continue to rise as the fallout of low crude prices takes its toll. Halcón Resources Corp. announced today that they have reached an agreement with stakeholders to restructure its balance sheet and eliminating approximately $1.8 billion of debt. Other companies to file bankruptcy this year include Linn Energy, Goodrich Petroleum and Sabine Oil & Gas.

Oilfield Helping Hands Serving Eagle Ford

May 18, 2016 Elizabeth Alford

Mineral Owners May be Losing Money — Help for Eagle Ford Families

A national non-profit that helps oilfield families in critical need of financial assistance has opened a new chapter that will serve families in the Eagle Ford.

Related: Texas Economic Index Declines

Oilfield Helping Hands was established in 2003 and has chapters serving the Rocky Mountain region, Oklahoma, Louisiana, Houston, the Permian and now, South Texas. The group has raised approximately $3.4 million in to assist individuals and families in the oilfield community who are in financial crisis,

“As the president of the new South Texas Chapter it is with pride that my team and I get to join this amazing organization,” said President Stephanie Blankenship. “During this economic downturn we feel privileged at the prospect of being able to give back to a community that supports many of our lives and families.”

The South Texas chapter of OHH serves the following Eagle Ford counties: Karnes, DeWitt, Zavala, La Salle, Atascosa, McMullen, Dimmit, Bee, Frio, Goliad, Webb, Wilson, Lavaca, Gonzales, Maverick, Live Oak and Duval

The services the OHH provide are crucial during the downturn, where around 72,000 Texas workers have lost jobs in 2015. It is estimated that another 40,000 could lose jobs this year.

The chapter is based in San Antonio and is just starting to organize its 2016 meetings and fundraising events. For information about joining and/or supporting the OHH South Texas Chapter, contact Blankenship at [email protected]

Learn more at oilfieldhelpinghands.org