SM Energy - Mitsui Reach Eagle Ford Shale JV Deal

SM Energy Eagle Ford Acreage Map

SM Energy sells 39,000 net acres to Mitsui for total commitments of $680 million (>$17,000 per acre).  The full payment will be made in the form of a cost carry in which Mitsui will carry SM for 90% of its costs on the acreage until the $680 million is exhausted. Industry analyst have been waiting for announcements from SM Energy on how they would raise capital for development of their Eagle Ford Shale assets.  The company is poised to double production for the entire company from the Eagle Ford alone.  That doesn't come at a small price.  Anadarko's JV with KNOC also raised eyebrows as SM Energy's non-operated position across that acreage was going to be a larger draw on the company's balance sheet.

"SM Energy will have roughly 196,000 net acres in the Eagle Ford shale, of which approximately 75% will be operated by the Company, after this transaction and the previously announced divestiture of Eagle Ford assets in LaSalle and Dimmit Counties, Texas are consummated. The size and timing of these transactions vary from the assumptions made in the Company's issued guidance, as these transactions are expected to close later in the year than originally anticipated and SM Energy is retaining a larger position in the Eagle Ford than was originally assumed. As a result, reported production and capital expenditures for the year will exceed the Company's currently published guidance. The Company will provide full capital, production, and cost guidance updates for the remainder of 2011, as well as preliminary capital and production guidance for 2012 in its second quarter earnings release."

Read the full press release at sm-energy.com

EOG Resources Eagle Ford Shale Frack Sand Plant

EOG Resources is expanding its operations through the building of a plant that will deliver frac sand to the company's Eagle Ford Shale operations.  Just like everything else that is popping up very quickly, there is concern over traffic from the local residents. 

"Just north of the city is the ongoing construction of an EOG Resources plant, which will be used for fracturing sand for use in oil and gas drilling.""The industrial business is a boom for the city and county's economy, but resident Rene Garza is worried about the plant's drainage plans, which is to send waste into Dry Creek."

"Garza also worries about the plant's environmental impact."

"Garza's home is about 125 yards from the creek, which is filled with debris. At times of heavy rain, the creek becomes easily flooded and inches closer to his house, he said."

"Garza wants the county to take care of the problem and to conduct a town hall meeting about the EOG plant, which Garza said wasn't really talked much about with the city residents."

Read the full news release at victoriaadvocate.com

Eagle Ford Shale Boom Books Hotels

Eagle Ford Shale Hotels and RV parks are booming. Citizens and business owners are all benefiting from the business created by the Eagle Ford Shale. Opening RV parks looks to be a great business.

"Across cities in sparsely populated South Texas, hotels have no vacancies, small apartment complexes are full, and mom-and-pop RV parks like the Costillas' are popping up (and filling up) seemingly overnight to catch the overflow of oil field workers pouring into the area."

"The overnight-millionaire money came as mineral rights were leased to oil and gas giants along the 400-mile-long Eagle Ford shale formation, which lies under 24 counties and sweeps from the border across the state to East Texas. But as Eagle Ford production begins in earnest in South Texas, providing housing - and quickly - in sparsely populated counties appears be the next way for the enterprising to profit off of the play."

Read the full news release at Chron.com

Koch Eagle Ford Shale Pipeline Going Forward

Koch Pipeline going forward with expansion that can potentially add 250,000 barrels per day of capacity from the Karnes County area to Corpus Christi. 

“ 'With this line, Koch Pipeline ultimately will have the capability to move 250,000 barrels-per-day of Eagle Ford production from the Karnes County area to the Corpus Christi-area,' said Kim Penner, KochPipeline president."

"With this new pipeline, and the other investments Koch Pipeline has made in terminals, lines and leaseagreements with other companies, the company will have increased transportation capability into Corpus Christi and Ingleside to more than 350,000 barrels per day."

Read the full press release at kochind.com

NuStar - Velocity join for Eagle Ford Condensate Pipeline

Velocity and NuStar join together to help move and store condensate from the Eagle Ford. The facilities will add needed capacity for the regions growing production.

"Velocity will build and operate a new 70-mile, 12-inch pipeline with the capacity to move over 100,000 barrels per day of condensate from Gardendale to Oakville, Texas. Velocity's 12-inch pipeline will interconnect with NuStar's new Oakville Storage Facility near Three Rivers, Texas. This storage facility will be connected to NuStar's existing 16-inch pipeline, which has the capacity to transport approximately 200,000 barrels per day of crude and condensate into NuStar's Corpus Christi North Beach Terminal.

The North Beach terminal has approximately 2 million barrels of storage capacity, large-scale marine loading facilities, and access to several Corpus Christi refinery markets. NuStar also has a land lease option for 15 acres contiguous to the existing property, which will provide terminal expansion capabilities."

"Velocity is currently constructing 65 miles of pipeline and 150,000 barrels of storage to transport condensate to Velocity's Gardendale Terminal for producers, including Shell E&P, Chesapeake, SM Energy and Rosetta Resources. The addition of the NuStar partnership allows Velocity to quickly offer these and other producers a downstream solution to transport condensate from the Gardendale Terminal to end markets with strong purchaser demand. Construction of Velocity's 12-inch pipeline and NuStar's Three Rivers storage facility will begin this summer and the system is expected to be in service by April of 2012."

Read the full press release at NuStarEnergy.com