Access Midstream - Chesapeake Reach $2.16 B Midstream Deal (Eagle Ford Included)

Chesapeake Eagle Ford Rig Map
Chesapeake Eagle Ford Rig Map

Access Midstream Partners (ACMP) has agreed to acquire additional midstream assets from Chesapeake for $2.16 billion. The deal adds natural gas gathering and processing assets across the country. Assets included expand Access Midstream's position in the Eagle Ford, Utica and Niobrara plays, as well as expanding the company's existing position in both the Haynesville and Marcellus dry gas plays. ACMP also negotiated an extension of its exclusivity period for Chesapeake's Mid-Continent assets.

Concurrently, Williams acquired a 50% general partner interest and a 23% limited partner interest in Access Midstream from Global Infrastructure Partners. Access Midstream's GP interest was owned by Chesapeake until June 2012, when it was purchased by Global Infrastructure partners for $2 billion.

J. Mike Stice, Access Midstream Partners’ CEO, commented,

“The acquisition of these midstream assets is a transformational opportunity for Access. Following this transaction, Access will become the largest gathering and processing MLP as measured by invested capital and throughput volume and will have a substantially diversified portfolio with a critical midstream position in the most prominent liquids-rich basins in the United States...

Aubrey K. McClendon, Chesapeake’s CEO, stated,

“We are pleased to announce further progress towards our asset sale goals for 2012-13. We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders.”

Read the full press release at AccessMidstream.com

Have You Seen the Eagle Ford From Space?

Eagle Ford Shale From Space - NASA
Eagle Ford Shale From Space - NASA

The Eagle Ford development is big enough to see from space. New photos from NASA show just how big the Eagle Ford really is. The play rivals many metropolitan areas in visibility from space.

“You know its a big development when people start talking about what it looks like from space!! ”

The photos were taken by the Suomi NPP Satellite in April of 2012. You can watch a video showing city lights around the world at nasa.gov

At the time the photos were taken, there were almost 280 rigs active in the area and approximately 250 rigs were targeting the Eagle Ford formation.

Thank you to Terry Nance who noticed the visibility of the play in new photos released from NASA.

DCP Plans New Eagle Ford Gas Processing Plant Near Goliad

DCP Midstream's Eagle Ford System Map
DCP Midstream's Eagle Ford System Map

DCP Midstream along with DCP Midstream Partners plans to build a 200 mmcfd cryogenic processing plant near Goliad, TX. The Goliad Plant has an expected completion date of early 2014.

It will be the seventh plant owned by DCP in South Texas and adds to the company's significant position.

DCP's Eagle Ford System is highlighted by:

  • 6,000 miles of gathering lines
  • >1 Bcfd of processing capacity
  • 3 fractionators with capacity of 36,000 b/d
  • Access to the Sand Hills NGL pipeline
  • Long-term commitments supported by 900,000 acres in the Eagle Ford.
“The Goliad plant is another great example of co-investment with our general partner. ”
— Bill Waldheim, president of DCP Midstream Partners

The Goliad plant will the the third plant in approximately 18 months brought online by the company is South Texas. The 200 mmcfd Eagle Plant will be online in the fourth quarter of 2012 and the 200 mmcfd Pettus Plant is has an in-service date of late 2013 or early 2014. The Goliad Plant is expected to be online in early 2014 as well.

Plains All American is Buying US Dev Group's Eagle Ford Crude Terminal

Gardendale Rail Map
Gardendale Rail Map

Plains All American Pipeline (PAA) has reached a $500 million deal to buy four rail facilities from U.S. Development Group. One of those facilities is part of the Gardendale Rail System near Cotulla, TX.

The four facilities are rail terminals:

The three crude terminals have daily loading capacity of 85,000 b/d and the rail terminal at St. James has unloading capacity of 140,000 b/d. An unloading facility is also planned for Bakersfield California.

“Plains has proven to be a great terminal and pipeline partner for USD, and we believe that this transaction will provide for the most efficient optimization of the assets involved.”
— Dan Borgen, U.S. Dev. Group CEO

The Eagle Ford Crude Terminal receives oil by truck near Cotulla, TX, in the community of Gardendale. It's just off I-35 80 miles south of San Antonio. The facility has capacity for 200 loaded rail cars, and can move as much as 40,000 b/d. The terminal is serviced by Union Pacific Railroad and the Gardendale Railroad. Crude moving from the terminal ends up in St. James, LA, where the facility can handle 300 loaded railcars at one time or 130,000 b/d. The St. James Rail Terminal also ties into several pipelines, including one owned by PAA.

"These assets represent a very attractive addition to our existing North American rail activities...." said Greg L. Armstrong, Chairman and CEO of PAA. "Given recent and projected increases in North American crude oil production and volumetric and quality imbalances expected to occur in certain regions over the next several years, we believe that strategically located rail loading and unloading assets will continue to play an important role in the transportation of crude oil in North America."

Crude oil pricing is as dynamic as ever across the U.S. Growing production in the Bakken and West Texas have put downward pressure on WTI (priced at Cushing, OK). On December 10, 2012, WTI was trading at ~ $86.50 / bbl and Brent crude was trading a little over $108 / bbl. That's a wide spread that creates attractive crude by rail economics. Plains also has an extensive NGL rail network and expects to have as many as 6,700 rail cars under lease by year-end 2013.

Plains All American Pipeline's company wide crude oil loading capacity is now 250,000 b/d and unloading capacity is 335,000 b/d on the East Coast, Gulf Coast, and West Coast.

Read the full press release at paalp.com

Eagle Ford Shale Regional Rig Count at 266 - December 7, 2012

Texas Oil Production Chart
Texas Oil Production Chart

Eagle Ford Shale drilling fell one rig to 266 running this past week. Atascosa County, with an increase of two rigs drilling, had the biggest change of any county. There are nine rigs running in the county, but even that is down from the peak of 15 in September 2012.

During the week, we highlighted that Texas oil production has reached levels not seen in more than 20 years! The graph shows just how much has changed in the past few years. Texas has reversed 30 years of declining oil production. Texas production eclipsed 2 million b/d in September 2012 and has almost doubled from lows just a few years ago. Texas is also helping drive production growth across the county. U.S. production is up almost 62% over the same time period.

Eagle Ford Oil & Gas Rigs

The natural gas rig count fell four rigs to 49. Natural gas prices fell further this week. NYMEX natural gas was trading $3.55 on Friday afternoon. That's approaching 15% lower than the highs realized two weeks ago.

The oil rig count gained one rig to reach 215 running in the area. WTI crude futures were down slightly on the week. Oil was trading ~$88 per barrel on Friday. Eagle Ford crude priced at $97.75/bbl on the 6th of December. Light crude and condensate in the area traded at $82.75 and $81.75, respectively.

There are 256 horizontal rigs running in the region and one storage well is being drilled in Zavala County.

La Salle County leads development with 39 rigs running. Karnes with 35 rigs, McMullen (28), Dimmit (22), Gonzales (22), Webb (22), DeWitt (19), Live Oak (13), Atascosa (9), Fayette (8) and Lavaca (8) round out the top Eagle Ford counties. [ic-c] South Texas Oil & Gas News:

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

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