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Lucas Energy purchased 5,500 acres of mineral leases prospective for the Austin Chalk, Eagle Ford and Eaglebine formations this week from Hall Phoenix Energy. The company bought the leases with $6.4 million of convertible stock. 1,300 acres are located in Wilson County, TX and the remaining acreage likely falls in the northern portion of the Eagle Ford region where the Eaglebine is prospective. Read more at bizjournals.com
Since Kinder Morgan's $21+ billion acquisition of El Paso was announced, it was believed Kinder would sell the accompanying exploration and production assets. We explored the possibility in more detail in the blog post "El Paso's Eagle Ford Assets on the Market" The real question is whether the e&p assets will be sold all together or if they will be sold in parts. I'm sure Mr. Kinder knows how much other deals have gone for and he'll want to get a similar premium for El Paso's Eagle Ford assets. If he doesn't get the premium or dang close baked into a deal for the entire business unit, he'll sell the assets off one by one. Expect a decision on selling the whole or parts real soon. Publicized estimates of El Paso's e&p value are around $8 billion.
Both Reliance Industries and Apollo Global Management are in talks to buy the unit. Reliance would be buying an operated stake in the U.S. where to date it only acts as a non-operated partner in the Marcellus Shale. Apollo would be adding a significant e&p business that it would likely grow and market to other companies or eventually IPO. Private equity firms like Apollo usually hold assets for 3-10 years.
Reliance Industries Ltd. and Apollo Global Management LLC are among companies in talks to buy El Paso Corp.'s oil and gas exploration and production unit, said people with knowledge of the matter.
Benefits of the Eagle Ford Shale reach much farther than the drilling rigs. Corpus Christi is realizing a 12% increase in tax revenues year over year and areas in the heart of development are seeing increases several times greater.
George West in Live Oak County, for example, received a monthly allocation of more than $57,000, which is 56 percent higher than December 2010's payment.
Through the December payment, George West is up 54 percent with more than $616,000, figures show.
Beeville's monthly allocation increased about 40 percent over December 2010, and the city is up 26 percent in collections with about $3.4 million.
Alice, away from the heart of drilling activity in Jim Wells County, continues to enjoy the retail and other side benefits of drilling as hotels are built and stores expand.
Alice's allocations top $15.3 million, which is 44 percent higher than by the same time in 2010.
The Eagle Ford Shale was ranked the second most important story in the San Antonio area in 2011. The number one issue for the area in 2011 was the contentious state budget.
After decades in the doldrums, the South Texas economy is being stoked by drilling in the Eagle Ford Shale, one of the hottest oil and gas plays in the country.Drilling permits in the region jumped from 26 in 2008 to 3,131 by early December, according to Texas Railroad Commission data.
Housing shortages, traffic jams and jobs begging for workers are now common in many formerly dead-end towns. Some landowners also are cashing huge lease and royalty checks. Property tax, sales tax and hotel-motel tax revenues are rising, filling counties' coffers.
San Antonio, too, is benefiting. Blue-chip oil field services companies, such as Halliburton Co., Baker Hughes Inc. and Weatherford International, are moving in.
The shale play has brought 5,000 jobs to San Antonio, and likely will bring twice that many within three years.
Read more at mysanantonio.com
We'll enter the 2012 with an Eagle Ford Shale drilling rig count of 265. With more than 210 of the rigs actively target the Eagle Ford proper, we've gone from Petohawk's discovery well in 2008 to current levels in three years. We'll enter 2012 at record development levels across much of the South Texas area. Oil prices held a little below $100/bbl and natural gas prices are below $3 at the time of my writing. The January natural gas contract is bouncing around $3/mmbtu (Henry Hub) and the natural gas rig count in our area fell two rigs to a total of 93 rigs working. We reiterate our belief the Eagle Ford rig count will remain dependent on liquids prices.
The number of oil rigs working remained flat at 172. Horizontal wells account for activity from 244 rigs drilling and we have not injection or service wells being drilled.
Webb (40) still leads the region, while Karnes (37), La Salle (33), McMullen (26), DeWitt (24), Dimmit (23), and Gonzales (19) continue as the core development areas.
News over the past week was light with Christmas and New Year, but we highlighted a few important items:
Come back weekly for updates on the South Texas drilling 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.
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