Sanchez Energy Commingles the Eagle Ford and Austin Chalk in

Sanchez Energy held its fourth quarter 2011 and full-year 2011 conference call on March 29, 2012. The company disclosed well results across its acreage and partial results from a vertical well that was completed in the Eagle Ford and Austin Chalk. The well is located in the company's Maverick area of Zavala and Frio counties. More operational quotes below:

Sanchez began its accelerated 2012 drilling program late in the first quarter of 2012 and currently has three rigs running, one in each of its core areas of Maverick, Palmetto and Marquis. A vertical well in Maverick, the Mark & Sandra #1 (100% W.I.), was completed and tested in March with an initial production rate of approximately 207 BOE/D. Production from the Eagle Ford was flow-tested in this well for about 30 days prior to setting a temporary bridge plug and perforating and fracking the Austin Chalk interval, which sits directly above the Eagle Ford. After testing of the Austin Chalk, Sanchez plans to drill out the temporary plug and comingle the Eagle Ford and the Austin Chalk production.

Also, in the Maverick area, the Ray #1H (100% W.I.) well was recently drilled to a total depth of approximately 12,000 feet including an approximate 6,000 foot horizontal section and cased. Completion operations will commence shortly. The rig which drilled the Ray is now drilling the Petro Pards 1H (100% W.I.), also in the Maverick area.

In its Marquis area, Sanchez added approximately 1,600 net acres to its land position bringing its core position in Fayette and Lavaca, Counties to approximately 50,000 net acres. The first well in this area, the Prost #1H (100% W.I.) is currently drilling.

In the Palmetto area, the first of 13 gross (6.5 net) wells, the Barnhart #7H (50% W.I.) is currently drilling.

Read the entire press release at sanchezenergycorp.com

South Texas Roads Take a Beating

South Texas roads are becoming a common news item.  Many companies are pitching in to help, but the problems will likely get worse before they get better. Reference our Eagle Ford Drilling numbers if you aren't up to date on activity. The drought last year might have helped a little.  Getting rain on a consistent basis makes keeping roads up to par even harder. Permanent fixes and upgrades to roads can cost from $100,000-$300,000 per mile. That's a hefty price tag, but one that will be a little easier to address once tax dollars begin to trickle down to the affected counties.

Atascosa, Bee, DeWitt, and Dimmit counties already have or are working on voluntary well fees to help pay for improvements.

So, DeWitt County officials have come up with a plan they hope will at least help remedy the situation: making the energy companies pay. Fowler has secured agreements with two drilling companies to pay $8,000 per drilled well for road maintenance. A third deal is in the works.

Fowler anticipates earning about $1.8 million in fiscal year 2012, based in the two companies' plans to drill 225 wells this year. That's still a drop in the bucket, but it's better than nothing, and it's inspired other counties — Dimmit, Bee and Atascosa among them — to follow its model.

Fowler characterized the understanding between the county and the drilling companies as “a gentlemanly agreement. They don't have the force of law.”

Read the entire article at mysanantonio.com

AC-Induced Corrosion on Pipelines in the Eagle Ford Shale

New pipeline construction is going “fast and furious” in the Eagle Ford Shale region, in the West Texas “Wolfcamp”, “Bone Spring” and related shales, and all across mid-America with the Bakken, Niobrara and other successful unconventional oil and gas plays.  Companies who build and operate pipelines must attract customers with product to move, secure the land over which pipeline right-of-ways will be cobbled together, and then construct the pipelines.

What happens when a pipeline runs near a high-voltage AC power line?

When soil resistivity is lower, and the voltage driving current along the AC power lines is high enough, the pipeline acts like the “secondary winding” of a transformer.  It receives AC power from the high-voltage lines by what is called “electrical induction.”  Once that power builds on the pipeline, AC electric current flow is going to happen.  When that AC current finds a place to “jump off” the pipeline to go back to the AC power grid, corrosion holes are created in the pipeline metal.  This is AC-induced corrosion, and it is a severe threat to pipeline integrity.

This induced AC power may even pose safety risks to the welders, laborers, operators and other people building the pipeline!  AC power can actually build up on the pipe as it sits above grade on cribbing.  Any time a pipeline is located in “near parallel” to parallel arrangement with high-voltage AC power lines, even for just a mile or two, a qualified corrosion engineering consultant should be brought in to check the situation.

Risks of AC-induced Corrosion and Voltage Buildups

These risks for AC-induced corrosion and unsafe voltage buildups are significant.  A recent story about a Barnett Shale area worker, directed to do some repair to a chemical injection system for a pipeline’s internal corrosion control system, tells the tale.  The gentleman walked up to a chemical injection point and reached up to close a small ball valve, before changing out some injection equipment.  The AC voltage buildup on this pipeline was so great that, when he touched the valve handle, he was hurled backwards by the jolt of “grounding out” the induced AC power!  From what was passed on, he did not suffer lasting injuries.  But this was way more than 15 volts of induced AC (the maximum “safety” voltage threshold), and a significant current passed through part of his body for the instant he was in contact with both the pipe and the earth.

AC Mitigation Systems Might Be Needed

If the opportunity for AC power buildup on the pipeline is pronounced, then "AC mitigation" systems must be designed and installed.  Similar to electrical grounding and lightning protection approaches, these mitigation systems are specialized in design, construction and monitoring.  Recognizing the need for them is paramount, especially when soil resistivities are low and chemical ions such as chlorides are present in higher concentrations in soils.  A lot of the soils in the Eagle Ford Shale play have this “not good” combination of resistivity and soil chemistry factors.  The same can be said, too, for a lot of West Texas and southeastern New Mexico.

Robstown Job Fair March 28, 2012 - Oil & Gas and Transportation

Don’t forget the Robstown Eagle Ford Job Fair March 28th starting at 10 am. Companies will have a couple thousand jobs on display. Get to the Richard M. Borchard Regional Fairgrounds early. Expectations are for 2,000 or more job seekers. There's a need for everything from entry level positions, up to skilled oil & gas professionals.

If you aren't able to make it to the event, you can easily search for jobs right now at the Eagle Ford Jobs page.

Net Midstream 105-mile Expansion to Agua Dulce Planned

Net Midstream's subsidiary, Eagle Ford Midstream, LP, has plans to expand its existing pipeline system by 105-miles from La Salle County to Nueces County. Anadarko is supporting the pipeline through a long-term transportation agreement.  The addition will add 105-miles of 24-30 inch pipe that will transport residue gas from Anadarko's Western Gas (Brasada) processing plant in La Salle County, TX to the Agua Dulce Hub in Nueces County, TX.

The Eagle Ford Midstream system, as of the announcement, consisted of 55 miles of 16-inch pipeline in La Salle and McMullen counties that delivers gas to Net's La Salle Pipeline and the Transco Pipeline near Tilden, TX. Net's La Salle pipeline delivers gas to a power plant in Pearsall, TX and the Transco Pipeline is a major interstate pipeline operated by Williams that delivers gas from South Texas to the Northeast.

Read more about Eagle Ford Midstream at netmidstream.com