Eagle Ford Oil Production Surpasses 500,000 b/d - Up 100%

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Eagle Ford crude oil production surpassed 500,000 b/d in February 2013. Initial reports from the Texas Railroad Commission peg production at ~470,000 b/d and a normal revision next month should put production near 520,000 b/d. That represents growth of approximately 100% over February 2012 production levels of ~270,000 b/d.

For reference, January 2013 production was revised up by almost 90,000 b/d in just one month, but normal revisions range from 40,000-60,000 b/d.

“A little more than 7 million b/d is produced across all of the US, so the Eagle Ford accounted for more than 7% of US supply in February.”

On the other end of the spectrum, natural gas production held virtually flat compared to a year ago at ~1.8 Bcf/d. 

“Industry analyst estimate the Eagle Ford is producing more than 800,000 b/d of crude oil, condensate, and NGLs ”

Remember, liquids reported by the TX RRC are measured at the wellhead. Additional condensate and natural gas liquids will be gathered further downstream in separators and processing plants. Industry analyst estimate the Eagle Ford is producing more than 800,000 b/d of crude oil, condensate, and NGLs.

Eagle Ford Regional Rig Count at 247 on April 19, 2013

Halcon Eagle Ford Activity Map
Halcon Eagle Ford Activity Map

The Eagle Ford Shale drilling rig count increased seven rigs to 247 running this past week. That's a welcome increase after settling near 240 rigs for the past two months.

The week was highlighted by several big announcements. Forest Oil is selling acreage for expertise and capital from Schlumberger. The deal also increases Forest's Eagle Ford production expectations in 2014.

Halcon has expanded Eagle Ford development into Brazos County and there were three midstream announcements worth well over $1 billion.

Eagle Ford Shale Conference & Expo

Don't forget about the Eagle Ford Conference & Expo coming up on May 1-2 in Robstown. If you haven't registered yet, you can do so here:

Eagle Ford Oil & Gas Rigs

[ic-l]The natural gas rig count bounced off the low of 16 last week to 17 this week. We're still down about 85% from the peak of natural gas drilling in the area. Natural gas prices continued to show strength and traded up to ~$4.40/mmbtu on Friday. With oil prices declining, strength in natural gas prices is a welcomed sight.

A total of 229 oil rigs are running in the region or six more than last week. The WTI crude oil price lost further ground as it traded near $88/bbl Friday afternoon. Eagle Ford light crude traded at $84.25/bbl on April 18th.

There are 221 horizontal rigs running in the region and an injection well is being drilled in Webb County.

La Salle and Karnes counties lead development with 33 and 32 rigs running, respectively. See the full list of drilling by county at the bottom of the page.

South Texas Oil & Gas News:

Our friends from the Texas Oil & Gas Associate and STEER contributed an article this week - Driving Safety A Top Priority For The Oil & Gas Industry

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

TexStar Midstream Buys Tierra Pipeline & Transportation Assets

Tierra Pipeline Map
Tierra Pipeline Map

TexStar Midstream and affiliated companies have agreed to buy Tierra Pipeline, LP, and Tierra Transportation.

TexStar Midstream Services will operate the Tierra Pipeline and Black Creek Well Services will operate Tierra Transportation. Black Creek Well Services is a sister company to TexStar Midstream.

The primary assets trading hands are:

  • Tierra Pipeline - 140-mile pipeline with right-of-way from San Antonio to Corpus Christi
  • Tierra Transportation - 60 employees and 35 tractor trailers
“We have been talking to Tierra on and off for years. The time was finally right for us to move. We are extremely excited about having Tierra Pipeline and Tierra Transportation as part of our asset base and team. We are buying this because we really like the business that Tierra has built and we want to grow it.”
— Phil Mezey , CEO of TexStar Midstream and Black Creek
“As we have always known, both the Tierra Pipeline and Tierra Transportation assets are strategically located in Central Texas. A multi-line right-of-way that extends from San Antonio to Corpus Christi and intersects the heart of the Eagle Ford Shale has proven to be a unique asset;”
— Tierra Companies CEO, Glen Gonzalez

Read the full press release at prnewswire.com

Atlas - Teak Eagle Ford Midstream Deal Worth $1 Billion

Teak Midstream Eagle Ford Map
Teak Midstream Eagle Ford Map

Atlas Pipeline Partners has agreed to buy Eagle Ford Midstream assets through a $1 billion acquisition ofTeak Midstream, LLC. Atlas will gain Teak's operated assets and assets that are jointly owned with TexStar Midstream.

Assets acquired in the deal included:

  • 200 MMcfd of cryogenic processing plant (Silver Oak)
  • 200 MMcfd cryogenic processing facility under construction (Silver Oak II)
  • 265 miles of 20" to 24" gathering and residue pipelines with 750 mmcfd of capacity
  • 275 miles of low pressure gathering lines

Atlas will also acquire a 50-75% interest in several assets jointly owned with TexStar Midstream. Atlas is expected to operated the assets once the deal closes:

  • 235 miles of pipeline, including rich gas gathering, header, and residue pipelines
  • 3 miles of NGL pipeline
  • A Co-Gen facility, which will produce power for the Silver Oak complex
“We are very excited about the acquisition of TEAK Midstream. We have been looking at the Eagle Ford shale for a number of years and are fortunate to have found what we believe is the ideal entry point. TEAK’s assets are the highest quality and best positioned for growth with minimal capital requirements. The assets are new, highly efficient, and are located in the heart of one of the most prolific plays in North America. ”
— Eugene Dubay, Atlas CEO

 

Atlas expects to further expand the assets going forward. Expansion projects include the potential for additional gathering lines and a third 200 mmcfd processing plant.