Comstock Resource's Average Eagle Ford IP is 565 boe/d in 2012

Comstock Resource Eagle Ford Map

Comstock Resources Eagle Ford wells have come online at an average of 565 boe/d in the first half of 2012. The Donnell C #1H, the Carlson C #1H and the Hubberd #3 H in McMullen County were the best wells brought to production in the second quarter of 2012 and produced 938, 862 and 793 BOE per day, respectively.

The company's restricted choke program continues to prove it is beneficial. 29 wells have been producing more than 90 days under the restricted choke program and yielded average production rates of 679 boe/d IPs, 524 boe/d in the first 30 days, and 453 boe/d in the first 90 days. That's just a 33% decline in the initial 24-hour period and the average for the first 90 days.

Comstock estimates its has 277 potential drilling locations, with expected gross EURs of 500,000 boe per well yielding net resource potential of 78 million boe. The company operates a total of 35,000 gross (28,000 net) acres in the Eagle Ford and recently CRK & KKR signed an Eagle Ford JV Agreement.

Read the company's full Q2 press release at comstockresources.com

Kinder Morgan & Phillips 66 Eagle Ford Crude Delivery Deal to Supply Sweeny Refinery

Sweeny TX Refinery Phillips 66

Kinder Morgan (KMP) and Phillips 66 have reached an Eagle Ford crude delivery deal. KMP will build a 12-inch, 27 mile lateral from its Eagle Ford Crude Condensate pipeline to Phillips 66's Sweeney Refinery in Brazoria County.

Phillips is committing to take a "significant portion" of the pipeline's initial 30,000 b/d of capacity. The pipeline will have the potential to be expanded to 100,000 b/d if needed.

KMP will invest approximately $90 million in the project, which also involves adding associated receipt facilities by constructing a five-bay truck offloading facility and three new storage tanks with approximately 360,000 barrels of crude/condensate capacity at Kinder Morgan’s DeWitt Station in DeWitt County, Texas, and Wharton Pump Station in Wharton County, Texas. Pending receipt of environmental and regulatory approvals, construction is scheduled to begin in the fourth quarter of 2012.

Kinder Morgan's Eagle Ford Crude Condensate pipeline was brought online in June of 2012.

Read the full press release at kindermorgan.com

Sanchez Energy Fayette & Lavaca County Eagle Ford Wells Produce 1,000+ boe/d

Sanchez Energy Eagle Ford Shale Map

Sanchez Energy's Fayette and Lavaca County acreage just got a nice boost. The company reported two wells that produced more than 1,000 boe/d each. The Prost #1H and the Prost #2H were drilled with approximately 5,500 ft laterals and completed with 14 and 17 frac stages.  Production was comprised of 90% 43 degree API crude and 10% 1,400 BTU gas. Oil is what you want in the current commodity price market. Even better, it's oil that is less than 50 degrees API. That makes it more attractive for Gulf Coast refineries. You can read more about prices in a previous Eagle Ford Oil Price article.

Sanchez Energy's Marquis Area

The company refers to its ~51,000 acres in Fayette and Lavaca County as the Marquis Area. Assuming an acreage spacing of 80-120 acres per well, the area has potential for 420-630 future drilling locations. Those locations are estimated to hold resource potential of 140 million to 210 million barrels of oil equivalent from the Eagle Ford.

The Sante #1H is currently being drilled and the rig will move back to the Prost area, within the Marquis Area, afterward. The company will construct central gathering and production lines in the Prost area in order to handle the future development of as many as 32 wells.

Other Horizons Provide Upside Opportunity

The 210 mmboe of potential reserves is purely attributable to the Eagle Ford Shale. Sanchez believes there is also significant potential in the Austin Chalk, Pearsall Shale, and Buda Limestone.

I haven't been able to locate the two wells in the RRC GIS tool. If you know the exact location of these two wells, please share in the comment section below.

South Texas Truck Driver Shortage Spreading Across the U.S.

Oil Tanker on the Highway

The South Texas truck driver shortage isn't alone. The American Trucking Association estimates the industry is short as many as 30,000 drivers across the country. The problem is compounded by high turnover rates: 70-90% a year. In South Texas, the high turnover rate is probably the only reason oil companies have been able to hire as many drivers as they have. It is school systems who can't hire bus drivers and local distributors who don't compete in pay that are struggling to find qualified personnel.

Average pay for an entry level truck driver ranges from $36,000-$45,000, but it rises to $50,000-$70,000 in the oilfield. Drivers work longer hours and spend time away from home, but for many the time away is offset by paychecks that twice that of typical jobs. Don't expect those pay rates to fall any time soon. It is more likely that rates for driving jobs outside of the oilfield will rise in response. If you have an interest in working in the oilfield, visit our Eagle Ford Truck Driving Jobs page.

Read the full article at mysa.com

Eagle Ford Shale Regional Rig Count at 264 - August 24, 2012

The Eagle Ford Shale drilling rig count settled at 264 for the week ending August 24th. In the biggest news of the week, Flint Hills Resources announced a $250 million upgrade of its 230,000 b/d West Refinery in Corpus Christi. The refinery currently handles a little more than 100,000 b/d of Eagle Ford crude and the addition of processing facilities will allow the company to accept even more South Texas oil. As many as 1,000 jobs will be required during peak construction. Flint Hills has spent more than $1 billion in the past decade expanding and upgrading the plant and this is the second $200 million dollar expansion in the past five years. Watch a video covering the story in our article Flint Hill Resources Plans $250 Million Refinery Expansion.

Eagle Ford Oil & Gas Rigs

The number of natural gas rigs running fell back to 60, after jumping to 65 last week. McMullen County (9) fell to single digits, while Karnes (12) and Webb (12) held as the only counties with more than 10 gas rigs running. There are 201 oil rigs working, which is up one week over week. One injection well is being drilled in Karnes County and two disposal wells are being drilled. One in Karnes County and one in Leon County.

Henry Hub futures were trading at ~$2.70 on Friday afternoon. That's just a few cents off last week's price.  Spot prices held roughly flat as well at $2.79/mmbtu.

WTI was trading at ~$96/bbl Friday afternoon and LLS crude prices stretched above $114/bbl. Oil traded above $98/bbl this week, but gave up gains in the past two days.

There are 245 horizontal rigs running in the region. The three counties leading development are Karnes with 41 rigs, La Salle with 31 and McMullen with 31. Dimmit (29), DeWitt (22), Webb (21), Gonzales (16), Frio (11), Live Oak (10), and Atascosa (8) round out the top Eagle Ford counties.

News items this week included:

• Eagle Ford Gas is Headed For Mexico as the Country Plans Major Expansions
• SM Energy's Operated Eagle Ford Production Eclipsed 200 mmcfe/d in Q2

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts.

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