Teak Midstream's Eagle Ford Gathering & Processing Begin Operations

Teak Midstream Eagle Ford Map

Teak Midstream has started operations at its South Texas gathering system and its Silver Oak (200 mmcfd) cryogenic processing plant. Teak has long-term midstream agreements with Comstock Resources, Statoil, and Talisman. With significant commitments, the company already plans to expand its gathering system by 200 mmcfd by the first quarter of 2014.

At the center of the development is Teak's Silver Oak Processing Plant, which is located near the community of Pettus, between Beeville and Kenedy in Bee County. The plant is specifically designed to handle high concentrations of liquid-rich gas. From the plant, residue gas will be transported by a 20-inch, 57 mile pipeline to various interstate pipelines and NGLs will be transported by a 12-inch, three mile pipeline to DCP's Sand Hills Pipeline. The Sand Hills pipeline ultimately delivers NGLs in Mont Belvieu.

“Teak Midstream is well positioned to serve new and existing customers who are pursuing liquids-rich gas in the Eagle Ford and other formations in South Texas. The proximity of our extensive gas gathering systems to escalating drilling activity is ideal, and our processing plant has extremely high NGL recoveries, making it one of the most efficient facilities in the region, which can improve wellhead value for our customers,” said TEAK Co-Chief Executive A. Chris Aulds. “

Teak Midstream's new gathering system actually includes two separate systems:

• One system is 178 miles of 24-inch and 16-inch pipelines that moves wet gas from Dimmit through Webb, La Salle, McMullen, and Live Oak counties on to the Silver Oak Plant
• The second system is 22-miles of 20-inch pipe moving rich gas from the Karnes area to the Silver Oak Plant in Bee County

Chesapeake's Eagle Ford Wells Look Better and Better

Chesapeake Eagle Ford Rig Map

Chesapeake's Eagle Ford well production rates are getting better and better. The company now has hundreds of wells producing and those data points allow the company to improve its drilling and completion processes.

In the third quarter of 2012, Chesapeake brought 124 wells to production. 115 of the wells (93%) produced at peak rates of more than 500 boe/d and 43 wells (35%) produced at peak rates of more than 1,000 boe/d. That's up from 91% of wells producing 500 boe/d or better and 31% of wells producing 1,000 boe/d or better in Q2 2012 when 121 wells were completed. In the first quarter of 2012, only eight of 60 wells brought online produced more than 1,000 boe/d. I'd say that's a pretty good improvement in just six months time. CHK is now completing more than three wells a week that produce more than 1,000 boe/d.

The company highlighted the following wells in its Q3 press release:

• The Faith-Yana A Unit C1H in Dimmit County achieved a peak rate of approximately 2,175 boe per day, consisting of 1,580 bbls of oil, 295 bbls of NGLs and 1.8 mmcf of natural gas per day;
• The Gates 010-CHK-B 1286-D3H in Webb County achieved a peak rate of approximately 2,100 boe per day, consisting of 660 bbls of oil, 655 bbls of NGLs and 4.7 mmcf of natural gas per day; and
• The Shining Star Ranch B 1H in La Salle County achieved a peak rate of approximately 1,580 boe per day, consisting of 1,450 bbls of oil, 80 bbls of NGLs and 0.3 mmcf of natural gas per day.

Coastal Bend Oil & Gas Permits - Nov 27, 2012

TX RRC Logo

Just eight permits were filed in the Coastal Bend area last week, but a couple of them were interesting.

• Apache permitted an 11,200 ft well in Nueces County
• EOG permitted a 12,750 ft horizontal well in San Patricio County

If you have an interest in the area, watch to see if these two wells get drilled. It will be interesting to see if they're typical Gulf Coast targets or if they are planning to test one of the shale formations in the area.

Read the full report at caller.com

Are Eagle Ford Lease Terms Driving Peak Activity?

Activity across the Eagle Ford has held at a fever pitch for more than a year now. Many operators have improved drilling times and scaled back the number of rigs be utilized, but they're still drilling the same number of wells. Other operators are stepping in to pickup additional rigs and we've seen very little change in the rig count overall. Approximately 270 rigs have been running in the region for almost 12 months.

“You have to drill a well to hold acreage,” said Tudor, who spoke at a media tour hosted by BHP Billiton Petroleum this month. “There's a lot of that in America.”

Many Eagle Ford leases were negotiated between 2008 and 2010. A typical lease has a primary term of 3-5 years. If a well isn't producing before the 3-5 years is up, the landowner has the right to lease the mineral rights again. Operators are drilling wells across the play to make sure leases are held by production before expiration. A well drilled before expiration of the primary term will save operators the cost of additional lease bonuses and potentially higher royalties. It could mean millions of dollars per well.

Read more from Jennifer Hiller at mysa.com

Eagle Ford Shale Regional Rig Count at 268 Thanksgiving Week - Nov. 23, 2012

Eagle Ford Shale drilling fell two rigs to 268 drilling in the region. Since Thanksgiving 2011, drilling in the Eagle Ford has increased by roughly 5%, but that really understates the increase in development activity. Operators are drilling wells as much as 50% faster than they were in 2011. Assuming operators are 20% faster across the board means drilling activity is likely up 25% or more since this time last year.

Eagle Ford Oil & Gas Rigs

The natural gas rig count settled at 55 this past week. Natural gas prices continue to trade at 2012 highs near $3.90 per mmbtu.

The oil rig count held flat at 213 rigs running. WTI crude futures were almost unchanged for the third week in a row. Oil was trading at ~ $88 per barrel on Friday. Eagle Ford crude priced at $99.75/bbl on the 15th of November. Light crude and condensate in the area traded at $84.75 and $83.75, respectively.

There are 254 horizontal rigs running in the region. Karnes County leads development with 36 rigs running. La Salle with 36 rigs, McMullen (30), Webb (24), Gonzales (23), Dimmit (22), DeWitt (19), Live Oak (13), Fayette (9), Lavaca (8), and Atascosa (7) round out the top Eagle Ford counties.

Oil & gas news items included:

• The Oil Boom Stops at the Border
• South Texas Community Colleges Get $1.3 Million Grant
• What is a Frac Holiday?

Also, be sure to read Devorah Fox's, of Mike Byrnes & Associates, article discussing the Steps in Planning a Safe Heavy Load Haul.

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

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