Abraxas Petroleum Eagle Ford Well Results - September

Abraxas Petroleum provided an operations update on the Eagle Ford. The company's first well in DeWitt County produced more almost 260,000 barrels equivalent in the first seven months and is currently producing 800 barrels of oil equivalent per day. A Talisman operated well, in which the company has an interest, came online in mid-August producing 1,500 barrels of oil equivalent per day after the companies completed a 14 stage frac stimulation. Abraxas is completing a horizontal well with 18 frack stages in Atascosa County and plans to drill two wells in McMullen County before year end. Abraxas has over 12,000 net acres that stretch across Atascosa, DeWitt, Lavaca, and McMullen counties. The company reports having as many as 75 net drilling locations on 160-acre spacing.

  • Abraxas currently owns a 41% equity interest in Blue Eagle, a joint venture between Abraxas and Rock Oil Company, LLC.
  • In DeWitt County, Texas, Blue Eagle's first well, the T-Bird 1H, continues to outperform expectations and is currently producing 800 barrels of oil equivalent per day, 50% of which is condensate or natural gas liquids. The well has produced approximately 260,000 barrels of oil equivalent during its first seven months on production. Blue Eagle owns a 100% working interest in this well.
  • In DeWitt County, Texas, Blue Eagle participated in a non-operated horizontal well with its 43.9% working interest. The Matejek Gas Unit 1 was drilled to a total measured depth of 17,865 feet, including a 3,600 foot lateral, and completed with a 14-stage fracture stimulation. The well was placed on production in mid-August and is currently producing approximately 1,500 barrels of oil equivalent per day on a 10/64-inch choke, 45% of which is estimated to be condensate or natural gas liquids.
  • In Atascosa County, Texas, the Grass Farms 1H was drilled to a total measured depth of 13,150 feet, including a 5,400 foot lateral, and completion operations are underway with nine of the planned 18-stages complete. Blue Eagle owns a 100% working interest in this well.
  • Blue Eagle anticipates drilling two horizontal wells on its recently acquired leasehold (2,487 net acres) in McMullen County, Texas in the fourth quarter.

 

GDF - Shale Drilling and the Environment

GDF voices a need for improvements before development and hydraulic fracturing move forward in Europe. I'm not sure if the CEO is saying fracking actually needs to improve or if the understanding of the technology and application needs to improve.

The technology used to extract oil and gas from shale rocks, a process that has revolutionized the U.S. energy industry, should be improved to protect the environment, the head of Europe’s largest gas company said.

“There are concerns about the environmental impact,” Gerard Mestrallet, chief executive officer of GDF Suez (GSZ) SA, said in an interview at Bloomberg’s headquarters in New York. “Probably it can be improved and probably it has to be improved.”

Hydraulic fracturing, a technique that uses water, sand and chemicals to break apart rocks and release trapped fuel, has made the U.S. the world’s largest natural gas producer. That success hasn’t quelled concern that fracking, as the process is known, risks polluting drinking water.

Read the full news release at bloomberg.com

Eagle Ford Shale Rig Count - September 23, 2011

Drilling Rig

The Eagle Ford Shale rig count is up six rigs to 239 active drilling rigs. The area has eclipsed the all time high from last week. The number of natural gas rigs working increased by five to a total of 121, while the oil rig count increased one rig to 118. Zero disposal wells or injection wells are being drilled. Horizontal rigs account for 209 of the 239 rigs drilling in the South Texas region. DeWitt, Dimmit, and Madison counties lost a total of seven rigs combined, while McMullen, Frio, and Robertson counties all increased by more than two rigs.

Chesapeake Energy (27) and EOG Resources (22) continue to work more than 20 rigs in the play.  Six companies have more than 10 active drilling units. We had a well fire in Karnes County yesterday and we got updated well results from Magnum Hunter. Other notable news can be read through the following links:

Stay tuned each week for an update on the South Texas rig count. 

Drilling Rig Count by Operator

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 SmithBits and not solely wells targeting the Eagle Ford Shale. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count and/or Smith Service Co's (Schlumberger) Smith Rig Count.

Drilling by County

Sasol Gas-to-Liquids Facility Converting Eagle Ford Gas?

Sasol announced a feasibility study on a gas-to-liquids facility in Calcasieu Parish, La, on September 13, 2011. The company will spend the next 18 months determining the the economic viability of the plant. The plant will add jobs in Louisiana, but don't plan on it converting much Louisiana onshore gas. The Haynesville is further downstream in terms of pipeline flows, so the plant will process gas sourced from offshore fields and you guessed it - Texas. More specifically, South Texas. The project will be a win for the Eagle Ford as it will increase demand in the supply region. With natural gas prices below $4 and oil prices about $80, there is a lot of room for an economic margin. That's 20 times the value of natural gas for a barrel of oil, which is only 6 times the energy.

South African energy and chemicals group Sasol today announced that it has chosen the southwestern region of the State of Louisiana as the site for a planned gas-to-liquids (GTL) facility. The project is slated to be the first plant in the U.S. to produce GTL transportation fuels and other products.

In a press conference today with Louisiana Governor Bobby Jindal, Sasol Managing Director: New Business Development Ernst Oberholster said, "We believe Sasol's proprietary GTL technology can help unlock the potential of Louisiana's clean and abundant natural gas resources and contribute to an affordable, reliable and high quality fuel supply for the United States."

"GTL fuels are an important part of the energy mix because they can advance energy independence in a way that is both cost-efficient and environmentally friendly", said Oberholster. In addition, unlike other proposed alternatives to conventional petroleum-based fuels, GTL fuel is used in existing vehicles and fuel delivery infrastructure without modifications.

 

Karnes County Well Fire Starts During a Hot Oil Treatment

A Karnes County fire broke out Thursday September 22, 2011, during maintenence of a 60 year old producing well operated by Amerril Energy. The fire was first reported as a rig explosion, but as details emerged it was evident the fire was started during a hot oil treatment of an existing well by Texas Hot Oilers out of Giddings. Hot oil treatments are used to clear paraffins out of a well. The paraffins (wax) can hinder production flows or block rod pumps from operating effectively. It has been reported the oil backed up and caught fire where propane was being used as the heat source. Flames stretched five to six stories into the air shortly after the explosion. Two members of the crew were taken to the hospital and one has already been released. The other is expected to make a full recovery.

“When I walked out of the courthouse in Karnes City, I could see the black smoke, and that’s a good 16 to 17 miles away,” said Karnes County Sheriff David Jalufka.

The sheriff and firefighters from two different jurisdictions responded, as the smoke was carried by 50-foot flames atop an oil well of FM 887 and County Road 229.