Eagle Ford School Districts Prep to Send Money to the State

September 17, 2012 R.T. Dukes

School districts in the South Texas Eagle Ford Shale region are preparing to send millions back to the state in coming years. Eight local districts were added to the Texas Education Agency's list of property-wealthy districts.

The reason is skyrocketing property values. In the past two years, property values in the Carrizo Springs district have increased from $441 to $2.5 billion. Cotulla ISD has seen a similar rise.

This year Cotulla will pay in a little less than $1 million, but next year the payment could swell to as much as $15 million. The wealth is welcomed, but it comes with a host of other obstacles. Several of the disstricts employees are living in trailers on site because of an Eagle Ford Housing shortage.

Read the full story at fuelfix.com

Eagle Ford Rig Count at 273 - BHP Overtakes Chesapeake as Most Active Driller

September 14, 2012 R.T. Dukes

The Eagle Ford Shale drilling rig count grew to 273 to end the week. BHP Billiton held for the second week in a row as the most active operator in South Texas. Chesapeake had held the top spot for more than a year and half, but has plans to lower its operated rig count to 25 by year-end and average 22 rigs running in 2013. The company has increased drilling efficiencies significantly over the past year. More wells per rig means fewer rigs are needed overall. The company's capital budget is also constrained by low natural gas prices. In the past month alone, the company has sold almost $7 billion in assets to bridge its funding gap. Some of those assets were in the Eagle Ford. You can read more in our article Chesapeake's Eagle Ford Midstream Assets Sold.

Eagle Ford Oil & Gas Rigs - New Oil Rig Count Record 217

The number of natural gas rigs fell to 53 this week. We've hovered in the 50-55 range for almost a month now and now there are no counties with more than 10 natural gas rigs running. Most leases are held by production and operators are going back to judging prospects based on economics. That will continue to be reflected in the natural gas rig count. There are a record 217 oil rigs working the region. That surpasses the old record of 215 set just two weeks ago.

One water well is being drilled in Bastrop County and two disposal wells are being drilled - one in Karnes County and one in Leon County.

Henry Hub futures were trading at ~$2.95 on Friday afternoon. That's an almost $0.30 jump from last week. Spot prices also increased to $2.94 from ten cents less in the prior week.

WTI was trading at ~$99/bbl Friday afternoon. This is the first week in a month we've ended the week higher than $96/bbl. Eagle Ford crude priced at almost $108/bbl on September 14th and light crude and condensate in the area traded at $95.50 and $94.50, respectively.

There are 252 horizontal rigs running in the region. The four counties leading development are Karnes with 38 rigs, Dimmit (32), La Salle with 32 and McMullen with 28. Webb (22), DeWitt (21), Gonzales (19), Atascosa (16), Frio (12), and Live Oak (11) round out the top Eagle Ford counties.

News items this week included:

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Eagle Ford 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.

Eagle Ford Shale Drilling by County

Chesapeake's Eagle Ford Midstream & Gathering Being Sold to Bridge Funding Gap

September 14, 2012 R.T. Dukes

Chesapeake Energy plans to sell Eagle Ford midstream & gathering assets as part of a larger deal with Global Infrastructure Partners for $2.7 billion. The bulk of the assets included in the deal are located in the Eagle Ford, Haynesville Shale, Utica Shale, and Niobrara Shale in the Powder River Basin of Wyoming. The company is also selling oil gathering assets in combination with other Mid-Continent assets for proceeds of $300 million. The $3 billion midstream deal was one of several divestitures announced earlier in the week that also included the sale of Permian properties for $3.3 billion. The company has planned $13-14 billion in asset sales in 2012 and announced $6.9 billion in sales so far in September 2012.

The assets sold in the third quarter included most of the company's Permian properties, almost all of the company's midstream assets, and non-core acreage in the Utica Shale. Permian properties were sold in three separate transactions with Shell, Chevron, and EnerVest. Midstream assets are being sold to Global Infrastructure Partners and oil gathering assets are being sold to an undisclosed buyer.

PEMEX Shale Play Spending to Grow to $200 Million

September 13, 2012 R.T. Dukes

PEMEX is preparing to spend $200 million researching and testing shale plays in Mexico. The national oil company plans to test two shale plays, with a focus in the Eagle Ford and one other play.

Commissioner Guillermo Dominguez said seismic studies to be carried out are designed to determine whether the rich petroleum deposits found in shale rock formations in the U.S. extend into Mexico. He said one of the two "large blocks" to be studied is an extension of the Eagle Ford shale rock formation that runs from Texas into Mexico. The other site is just down the Gulf of Mexico near Tampico.

Even if PEMEX is successful, don't expect a drilling boom any time soon. Company representatives expect they are 5-8 years away from true shale gas development. To be honest, there's no need to push it. The country is positioned well to import U.S. natural gas, which is very cheap in in the worldwide market. Read more about the company's plans in our article Eagle Ford Gas is Headed to Mexico.

You can read an article with additional quotes at rigzone.com

Energy & Exploration Preparing to Go Public with Eagle Ford & Woodbine Acreage

September 12, 2012 R.T. Dukes

Energy & Exploration is preparing for a potential $275 million public offering of shares. The company has more than 43,000 acres in Texas and Colorado and has agreed to acquire ~57,000 acres in the Eagle Ford and Woodbine from Chesapeake for $125 million. It was not disclosed if there was production associated with the acquisition. If not, the company is paying a little more than $2,000 per acre.

Energy & Exploration's founder has a history in land work and the company decided to step into operating at the beginning of 2012.

Hunt Pettit, 42, an entrepreneur and land man who was an early mover in the Eagle Ford Shale, now works at the helm of Fort Worth, Texas-based Energy & Exploration Partners Inc.

The company will trade on the NYSE under the symbol ENXP. Read more about the company's SEC filing at marketwatch.com