Marathon Oil News: More Eagle Ford Deals to Come

News out of Marathon Oil is that it plans to continue its upbeat attitude about the Eagle Ford.  Marathon Oil is fresh off of a 3.5 billion acquisition of Eagle Ford Shale acreage and a recent spinoff of it's refinery business.  Expect the upstream focused Marathon Oil to continue acquiring shale oil property for development.

"The head of Marathon Oil Corp. announced Friday his company will continue to buy acreage in the Eagle Ford and other shale basins where it already has operations as a means of growing its exploration business following the spin- off of its refining unit."

"Marathon announced earlier this month it plans to buy oil and gas properties in the Eagle Ford shale field in South Texas for $3.5 billion."

"Marathon CEO Clarence Cazalot said the Houston-based company concentrate primarily on oil acquisitions in the Eagle Ford, Niobrara and Bakken shales."

“ 'We are not spending very much money on natural gas,' Cazalot said. 'You’ll note about all of those, they are predominantly liquids focused.' ”

Ethanol Tax Credit at Risk by Senate

The ethanol tax credit so long maligned by many free market proponents is finally coming under the gun from politicians. Ethanol producers of course don't like it... but liquids producers in the Eagle Ford Shale play should be happy at the support this will add to crude oil and liquids pricing.

"Three senators reached a deal on Thursday to repeal the $6 billion per year ethanol tax credit by the end of July, an agreement that must still be passed by Congress.""The loss of the subsidy could add extra costs for ethanol blenders such as Valero Energy Corp and Marathon Oil Corp, but it is unlikely to reduce demand for corn."

" 'This agreement is the best chance to repeal the ethanol subsidy, and it's the best chance to achieve real deficit reduction,' said Senator Dianne Feinstein from California, who made the deal with senators John Thune from South Dakota, and Amy Klobuchar from Minnesota."

"The deal would reduce the federal deficit this year by $1.33 billion and direct $668 million to extend tax breaks for technologies to help alternative motor fuels including biofuels get to market, Feinstein said."

Read the full news release at reuters.com

Martin Midstream Plans Eagle Ford Corpus Christi Terminal

Martin Midstream is adding a $25 million terminal at the Port of Corpus Christi that will have storage capacity of 300,000 barrels of oil and will be expandable to 600,000 barrels of oil.  The terminal will also have off loading capable of transferring the crude to oil tankers and barges.

"Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") announced the construction of a new terminal at the Port of Corpus Christi, Texas (the "Port") to receive crude oil from the Eagle Ford shale via the recently announced Harvest Gardendale Pipeline.""As currently scheduled, the Partnership will construct over 300,000 barrels of crude oil storage at the new facility. In addition, the Partnership has the ability to expand the capacity of the terminal by an additional 600,000 barrels."

"The total project cost is estimated at $25.0 million and is an anticipated to be in service by late 2011. Initial receipts of crude oil will arrive via truck until the Harvest Gardendale Pipeline becomes operational in the first half of 2012."

"Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, MMLP's general partner said, 'We are pleased to announce additional Port of Corpus Christi infrastructure and a long-term terminalling agreement with a major integrated oil company. MMLP, with these new assets, will seek to meet terminalling demand from the growing Eagle Ford shale production. This new facility is well-positioned for significant fee-based cash flow growth as Eagle Ford activity continues to gain momentum.' "

Read the complete press release at martinmidstream.com

Valero Three Rivers Refinery gets Eagle Ford Shale Oil

The Valero Refinery is already getting 35,000 barrels a day and expects that number to grow to 50,000 barrels a day by year end.  My expectation is that you'll begin to see these refineries expanding or changing the crude slate they accept to allow for the refining of more Eagle Ford Shale crude oil.

"The Valero refinery began taking in Eagle Ford crude only late last year. Now the 100,000-barrel-a-day plant is processing about 35,000 barrels of Eagle Ford crude oil daily, a total that's expected to rise to about 50,000 barrels a day by year's end.""The boost in Eagle Ford drilling and changes at the Valero plant have prompted local officials to adopt and copyright a new slogan for the city: 'Three Rivers — Heart of the Eagle Ford Shale.' ”

“ 'We have a location advantage,' said Harry Wright Jr., vice president and general manager of Valero Three Rivers Refinery."

"Using more locally produced crude oil will enable the Valero refinery to reduce costs and boost profit margins. The less expensive Eagle Ford crude will, as its use increases, replace more expensive foreign oil that arrives at Gulf Coast ports such as Corpus Christi and then is sent by pipeline to the refinery."

Read the full news release at mysanantonio.com

GeoResources - Fayette County Eagle Ford Update

Fayette County is attracting more interest and positive results from GeoResources will only fan the fire of the oil boom. Both wells produced more than 1,200 barrels per day during initial test.  That's good for anywhere in the Eagle Ford Shale.

"We recently successfully drilled and completed our first two Eagle Ford wells in our operated project area in Fayette County, Texas. ""We also recently completed drilling our third Eagle Ford well, the Black Jack Springs #1H well, in which we have a 44.1% working interest. After drilling the Black Jack Springs #1H well, the drilling rig was moved to drill the West Cannon Unit #1H well in our Giddings Austin Chalk Field development area in Grimes County. After drilling the West Cannon Unit, the rig will return to our Eagle Ford project in August 2011 and will continue drilling Eagle Ford wells."

"Since April of 2010 we have acquired 24,000 net acres in the Eagle Ford Trend with acreage primarily located in southwest Fayette and northern Gonzalez counties. Our plan is to add a second dedicated drilling rig in the fall of 2011 and a third rig in early 2012 and potentially a 4th rig in mid-2012. Our intent is to significantly accelerate our Eagle Ford drilling in the second half of 2011 and into 2012. As we move forward in our development of this project area, we expect each of our operated rigs to drill 8-10 gross wells per year."