Bentek's Benposium May 15-17, 2012

Bentek's Benposium conference is May 15-17 in Houston. We're out at the event and will be providing updates on the latest developments affecting South Texas.

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If you're new to the event, here's a short description of Benposium 2012:

With great changes come great opportunities and North America is poised once again to reassert itself as a leading global energy innovator, producer and exporter. But with new expectations and assumptions come unknown risks and untold rewards. Questioning historical production, transportation and pricing relationships are at the center of the debate as new technologies rattle the energy supply stack.

The shale gas revolution, which is now spreading to oil, continues to have a profound impact on the continental energy landscape and new possibilities are unfolding faster than many in the market anticipated. Producers focusing on traditional natural gas plays have entered into a new era of production optionality, with NGLs and oil the sought after prizes, while abandoning emerging plays that were first developed just a few years ago. International investors have taken notice, investing billions into developing and transporting new domestic resources. The power generation, end users and petrochemical sectors face monumental decisions for making long-term strategic decisions.

This is the objective of BENPOSIUM 2012, a premier event from BENTEK Energy: To explore the most important aspects of these developments through the practical application of fundamental analysis in energy markets.

Read the full agenda at benposium.com

Marathon - 16-20 Eagle Ford Wells Coming Online Each Month

Marathon Oil is increasing its pace of development in the Eagle Ford. The company currently has 18 rigs running and announced plans to add 2 more in short order. With four dedicated frac crews, the company expects to complete 16 to 20 wells per month going forward. Spud-to-spud drill times have fallen to 25 days per well. With additional declines in drill time possible, it's not far stretch to believe the company will be bringing 20+ wells online per month by the end of the year.

Production will follow in step. The company brought on over 1,000 boe/d per week in April and will potentially eclipse 50,000 boe/d of production by the end of the year. That's almost triple rates from mid-year 2011.

Marathon has been one of the most active companies in the Eagle Ford since its $3.5 billion acquisition of Hilcorp Resource's acreage in mid-2011. The company has continued to add to holdings.  In early May, Marathon announced a $750 million acquisition of Paloma Partners II's Eagle Ford acreage.

The company also expects to spend over $200 million on midstream and pipeline infrastructure in 2012.

Read more at ourMarathon Oil Eagle Ford page

Regency - Talisman - Statoil Plan $150 Million Expansion of Eagle Ford Gathering Assets

Regency Eagle Ford System Map

Regency Energy Partners announced a $150 million expansion of the company's Edwards Lime Gathering Joint Venture. The Eagle Ford pipeline and midstream expansion will bring capacity of the company's system up to 160 mmcfd of natural gas and 17,000 b/d of crude. Regency owns 60% of the joint venture and operates the assets. Talisman and Statoil own the remaining 40%.

Talisman and Statoil are supporting the expansion by dedicating production from their area of mutual interest. The expansion is supported through fee-based contracts and is scheduled for completion in the fourth quarter of 2012.

Read the full press release at regencyenergy.com

Eagle Ford Shale Regional Rig Count Soars to 282 - May 11, 2012

drilling rig 4

The Eagle Ford Shale drilling rig count jumps 11 rigs this past week to set a new record in the region at 282 rigs.  That's in the same week that UTSA released expectations of the economic impact of the play.  In 2011 alone, the Eagle Ford supported almost 50,000 jobs and had an overall impact of $25 billion in South Texas. Better yet, employment figures will likely swell to more than double the 2011 numbers and the total impact could increase three to four fold! You can find our notes from the Economic Impact of the Eagle Ford Luncheon - Here. The rig count surpassed the previous weekly record of 278 that was hit twice in April.  This week, we're highlighting the second most active operator in the Eagle Ford. EOG has 25 rigs active with 13 in Gonzales County, 8 in Karnes, 3 in La Salle, and one in Atascosa County. The company's success led to EOG Increasing Liquids Volume Growth Projections in its quarterly call.

Eagle Ford Oil & Gas Rigs

The natural gas directed rig count rose four rigs this week to a total of 74. We now have ten or more gas rigs running in four counties - DeWitt, Karnes, McMullen, and Webb. Henry Hub futures prices have traded up to $2.50/mmbtu this week. That's a 20% move over the past couple of weeks and will be welcomed by oil & gas operators. It's still much lower than many companies need, but it's better than $2 or less.....

Oil directed activity jumped 5 rigs to 206 as oil prices fell to less than $96 per bbl on Friday.

260 horizontal rigs are running in the region, with 2 disposal wells being drilled in Atascosa County. Karnes County leads development with 45 rigs. La Salle (42), Dimmit (31), Webb (28), McMullen (26), DeWitt (25), Gonzales (20), Live Oak (10), and Atascosa with 10 make up the top Eagle Ford counties.

Several earnings reports, as well as the economic impact study dominated headlines this week:

• Chesapeake Shifts 1/3 of Capital to the Eagle Ford - Production Hits 75,000 boe/d
• Pioneer Grew Eagle Ford Production 15% in the First Quarter of 2012
• Marathon is Acquiring Paloma Partners in a $750 Transaction
• Copano Energy Announced its Second 400 mmcfd Expansion at the Houston Complex

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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

Copano Energy Announces 400 mmcf/d Processing Expansion

Copano Energy is adding another 400 mmcf/d processing plant at its Colorado County facility. The cryogenic plant is being built is response to producer demand from the Eagle Ford Shale. The Houston Central complex will have 1.0 Bcf/d of capacity when the project is complete. Copano expects to spend $190 million to construct the facility. The plant is supported by a commitment from a major operator in the Eagle Ford and expected in-service is mid-2014.

"This second cryogenic expansion project reaffirms our commitment to being a leading midstream service provider in the Eagle Ford shale," said R. Bruce Northcutt, President and Chief Executive Officer of Copano Energy. "While we expect to invest capital for this project at a 5-times multiple or better, our producers and customers will also benefit from the expansion through enhanced performance and improved recovery of natural gas liquids."

This is the second major expansion of the facility. The first, is already under construction and will be completed in early 2013.

2012 has been full of midstream announcements. You can read more at our Pipeline and Midstream News page.

Read the full press release at copano.com