Kinder Morgan Expanding Its Eagle Ford Crude & Condensate Pipeline Into Karnes

Kinder Morgan Crude & Condensate Expansion into Karnes County

Kinder Morgan is expanding its 300,000 b/d Eagle Ford crude & condensate pipeline (KMCC) 31 miles into Karnes County.

The expansion will extend the 178-mile pipeline from the DeWitt Station in DeWitt County, TX, to a Centeral Delivery Facility operated by ConocoPhillips near Helena in Karnes County.

Kinder Morgan will also build receipt tanks and a truck unloading facility. Construction will begin in July.

KMP Products Pipelines President Ron McClain stated “This expansion further assists our commitment to deliver up to 300,000 barrels per day of crude and condensate from the Eagle Ford Shale.”

The development is supported by long-term commitments from ConocoPhillips.

Reference the article Kinder Morgan Plans Second Condensate Facility at Galena Park for more details on the company's condensate processing facilities.

Sanchez Energy Raises Eagle Ford Production Guidance

Sanchez Energy Eagle Ford Shale Map

Sanchez Energy has raised it's Eagle Ford production exit rate guidance to 15,000-17,000 boe/d for 2013. Capital expenditures have also been revised to $475 million compared to $347 million previously.

The big increase is due to the purchase of 43,000 net acres from Hess. The deal closed on May 31, 2013, with a price tag of ~$280 million. Read more about the deal in the article: Sanchez - Hess Reach Eagle Ford Deal For $265 Million

Over 90% of the $475 million capital budget will be spent drilling and completing 65 gross (46.7 net) wells. Ten of those wells will be directed at the newly acquired Cotulla assets.

Tony Sanchez III, President and Chief Executive Officer of Sanchez Energy, commented: "As a result of the closing of our Cotulla asset acquisition and an updated review of our operational opportunities, we have increased our 2013 capital program and activity levels.

Sanchez is also increasing its development plans in the Palmetto area in Gonzales County, TX, after realizing better well results than expected. A total of 9 gross (4.5 net) more wells will be drilled in the area. That brings the total number of planned wells in the Palmetto area to 34 gross (17 net) this year.

Sanchez will run three rigs in the Palmetto area in the second half of the year.

Read the full press release at sanchezenergycorp.com

Eagle Ford Regional Rig Count at 264 May 31, 2013

Tanker Truck on the Highway

The Eagle Ford Shale drilling rig count increased by two to 264 rigs running this past week. The Eagle Ford accounts for 15% of all rigs active in the U.S.

The U.S. rig count is up nine to 1,771 rigs running. A total of 354 rigs are targeting natural gas and 1,410 are targeting oil. The remainder are drilling services wells (e.g. disposal wells, injection wells, etc.).

The high point of the week came this past Sunday when the Texas Legislature voted to set aside $225 million for county roads in West and South Texas. The money will be split evenly and TXDoT will administer the grant program. You can read more in the article Texas Legislature Sets Aside $225 Million For County Roads.

*Note* Now quoting Baker Hughes. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (~230 rigs). Our numbers cover a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table at the bottom of this article.

Eagle Ford Oil & Gas Rigs

[ic-l]A total of 33 rigs are targeting natural gas. Two less than last week. It has been a wild month for natural gas. The commodity was trading at ~$4.00/mmbtu on Friday afternoon. In May, natural gas traded up, then down, back up last week, and is ending down this week.

A total of 229 oil rigs are running in the region. WTI futures were down from the past two weeks to ~$92/bbl. Eagle Ford light crude traded at $88.50/bbl on May 31st.

Karnes and La Salle counties lead development with 35 and 32 rigs running, respectively. See the full list of drilling by county at the bottom of the page.

South Texas Oil & Gas News:

• Driver Safety, The Law and Cellular Based Devices
• High Point Infrastructure Building Gathering System In Gonzales County
• Pioneer's Eagle Ford Production Up & Costs Down
• State Legislature Sets Aside $225 Million For County Roads
• Employers Struggle To Fill Open Positions In South Texas

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

Eagle Ford Shale Drilling by County

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 Baker Hughes 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.

Employers Struggle To Fill Open Jobs In South Texas

If there is one thing we can say without question, the Eagle Ford has created a job boom across South Texas. A recent UTSA study estimates the oil & gas industry supports over 116,000 jobs across a 20 county area impacted by the play. It's great news, but it also means common positions that don't pay as much have a hard time filling openings. 

If you haven't done so, join over 15,000 other job applicants and search our South Texas Oilfield Jos Board for listings across the region. Use the search function to find more than just oilfield jobs

“My guess is they are going to have to raise wages to more than the $26,700 paid currently.”

State Legislature Sets Aside $225 Million For County Roads

Tanker Truck on the Highway

In what looks to be a start to fixing local roads in South Texas, the state legislature has set aside $225 million in what was deemed a "Transportation Infrastructure Fund".

The Texas Department of Transportation (TXDot) will administer a grant program that will distribute the funds. The beneficiaries will be counties in West and South Texas who have been affected by high volumes of oilfield traffic.

Senator Carlos Uresti stated "It’s never been done before where the state appropriates money for county roads.”

The program will last for two years and the money will be used to fix county roads. Counties will also be able to set up "County Transportation Reinvestment Zones" that will allow local districts to raise property taxes and sales taxes to help fund road repairs.

TXDoT money typically funds repairs of highways and farm to market roads. This will be the first time state money has been used to repair county roads. Local counties will have to cover 10-20% of the cost of repairs.