Statoil Expanding Its Eagle Ford Position?

Statoil's Eagle Ford position isn't going to get any smaller. Actually, count them in the pool of buyers when it comes to acreage. The company has only been a JV partner to date, but expect that to change with the corporate acquisition of Brigham Exploration. You can bet Statoil's cashflow will be used to expand the company's operated footprint in plays like the Bakken, Eagle Ford, and Marcellus.

"We are still looking in the Eagle Ford," said Helge Haldorsen, head of North American Strategy for Statoil. "We want to cash in on the learning curve."

Read more at reuters.com

Updated Well Results from Magnum Hunter - December 2011

Magnum Hunter Resources announced well results from its two most recent Eagle Ford wells in Lavaca County, TX. The two wells produced an average of 1,270 boe/d and 1,590 boe/d over the first 24 hours of production. The wells are the most recent of a 16 well program planned for 2011.

• The Furrh #2H which was drilled to a measured depth of 15,876 feet (horizontal lateral length of 5,945 feet), was fraced with 20 stages and placed on production November 15, 2011. The 24 hour flowing initial production rate ("IP") was 1,270 Boepd on a 19/64" choke with 1,680 psi FCP.
• The Kudu Hunter #1H was drilled and cased to a measured depth of 16,302 feet (horizontal lateral length of 5,751 feet), was fraced with 20 stages in mid-November. The 24 hour IP rate was 1,590 Boepd on a 22/64" choke with 2,200 psi FCP.

The capital expenditure budget for the Eagle Ford Division for fiscal 2011 remains at approximately $75 million (30% of the total company wide capex budget) to drill 16 gross wells (8.4 net wells). Magnum Hunter's spudded its first Eagle Ford Shale horizontal well in June 2010 and to-date, the Company has drilled and completed 13 gross wells (7.8 net wells), all of which are on production.

The Snipe Hunter #1H and Leopard Hunter #1H wells (50% working interest each) are located in Lavaca County, Texas and are both currently drilling. Each of these wells will have an approximate 25 stage frac job beginning in mid-December. EA new gas gathering system went operational in June with all of Magnum Hunter's existing wells connected and selling wet gas into this new gas gathering system.

Magnum Hunter Eagle Ford Map

Read more at marketwatch.com

Eagle Ford Drilling is Flat - December 2, 2011

rig worker

The Eagle Ford Shale drilling rig count remained flat at 257 rigs running over the past week.  An average of 253 drilling rigs worked throughout November and we're starting even higher the first week of December.  The last month of the year is setting up to be the most active drilling month in the Eagle Ford's history. The approximate 210-215 rigs targeting the Eagle Ford formation will easily drill more than 220 wells in December. Oil futures prices continue to show strength (WTI <$100/bbl) and natural gas futures prices (HH<$3.60/mmbtu) are leaving a lot to be desired for companies and mineral owners alike. The January contract for natural gas is better than December, but it is going to take a lot of cold weather to get prices to move in a positive direction. The natural gas rig count fell 4 to a total of 97 rigs. That's the first time natural gas drilling has dropped below 100 rigs in almost a year. A total of 5 oil rigs were added to bring us back up to 160 running.

Webb County did drop below 40 rigs during the week. Webb (38) still leads the region, while Karnes (34), La Salle (32), Dimmit (26), DeWitt (21), Gonzales (19), and McMullen (19) counties together account for 85% of Eagle Ford drilling. The companies with the most significant changes were Petrohawk (BHP) who dropped 3 rigs and Chesapeake who added 2 .

News highlighted throughout the play included:

• South Texas Oil & Gas Job Fairs
• Slow Permitting During Thanksgiving Week

Stay tuned for updates on the South Texas drilling 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 formation. 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 Rigs by County

Plains All American Pipeline Buys Velocity Midstream's Eagle Ford Assets

Plains All American Pipeline (PAA) announced plans to acquire Volocity Midstream's - Velocity South Texas Gathering assets.  The pipeline and midstream deal includes over 120 miles of crude oil and condensate pipe with capacity of 150,000 barrels per day through parts of Dimmit, La Salle, and Webb counties. The pipeline system is underpinned by volume commitments from major producers in the area. If warranted, the system can be expanded to handle 185,000 barrels per day. The system also has storage capacity at Catarina and Gardendale. The Gardendale facility ties directly into Plains All American's existing Eagle Ford pipeline.

The deal was part of a larger announcement by PAA that included assets on the East Coast, in the Permian Basin, and in Canada for a total of $620 million. Much of the midstream activity in South Texas to date has been new projects, but we expect more consolidation in the coming months as midstream companies look to gain a true foothold in the area. Infrastructure has been one of the few restricting factors in the play, but major projects are on pace to remedy current concerns over the next couple of years.

The Partnership recently closed the acquisition of 100 percent of the member interests in Velocity South Texas Gathering, LLC ("Velocity") from Velocity Midstream Partners, LLC. The deal includes approximately 120 miles of crude oil and condensate gathering and transportation pipelines currently in advanced stages of construction in the area of South Texas.

The Gardendale storage hub will have access to PAA's Eagle Ford pipeline as well as other transportation alternatives, including third party pipelines, truck and rail. Over the next 18 to 24 months, PAA expects to complete current construction, extend the system to access additional condensate barrels and other crude oil-oriented portions of the major resource play, and increase terminal capacity at Gardendale from 150,000 barrels to 250,000 barrels.

Read the entire news release at paalp.com

Crimson Exploration Announces Karnes County Well - Spuds Dimmit Well

Crimson Exploration completed a nice Karnes County well, finished drilling a second well and is spudding wells in Karnes and Dimmit counties.  The recently completed well came online producing over 1,000 boe/d at a 14/64ths choke with over 3,000 psi of pressure. Crimson's current plan is to drill in Karnes County through the first quarter of 2012. The Eagle Ford is a major contributor to the company's plan to produce 50% liquids by the middle of 2012.

In Karnes County, the Littlepage McBride #3H, targeting the Eagle Ford Shale formation, commenced production at a gross rate of 1,045 Boepd (965 Bopd and 479 Mcfpd) on a 14/64th choke and 3,057 psi of flowing tubing pressure. The well was drilled to a total measured depth of 16,613 feet, including a 5,918 foot lateral, with 15 stages of frac. The Littlepage McBride #4H, also targeting the Eagle Ford Shale formation, commenced production at a gross rate of 1,126 Boepd (1,002 Bopd and 744 Mcfpd) on a 14/64th choke and 3,072 psi of flowing tubing pressure. The well was drilled to a total measured depth of 16,803 feet, including a 6,061 foot lateral, with 20 stages of frac.

Drilling operations have recently concluded on the Littlepage McBride #6H (53% WI) where the well was drilled to a total measured depth of 16,059 feet, including a 5,290 foot lateral. Located directly to the west, the Littlepage McBride #5H (53% WI) was drilled to a total measured depth of 16,200 feet in October, including a 5,460 foot lateral. It is expected that both wells will be completed, each with 18 stages of frac, by the end of this quarter. The rig was then moved to begin drilling the Littlepage McBride #7H (53% WI). This well is anticipated to be drilled to a total measured depth of 16,700 feet, including a 5,950 foot lateral and 18 stages of frac. Upon completion of drilling the #7H well, the rig will move one mile north to the Glasscock #1H (100% WI) also targeting the Eagle Ford Shale. Crimson intends to have an active program in this area through at least the first quarter of 2012.

In Dimmit County, Texas, Crimson spud the Beeler #1H (50% WI), targeting the Eagle Ford Shale formation. The well is expected to be drilled to a total measured depth of 14,140 feet, including a 7,500 foot lateral, with 15-20 stages of frac. Once drilling operations conclude, the rig will move back to Zavala County prior to year end to drill the KM Ranch #2H (50% WI).

Read the entire news release at crimsonexploration.com