NET Midstream Gets FERC Approval for NET Mexico Pipeline to Export Eagle Ford Gas

November 21, 2013 R.T. Dukes

NET Midstream has received FERC approval for border crossing facilities that will allow the NET Mexico Pipeline to export Eagle Ford natural gas to Mexico. At capacity, the pipeline could double U.S. natural gas exports to Mexico.

The Net Mexico pipeline is a 42-inch, 124 mile pipeline from Nueces County to Starr County in South Texas.

The pipeline is backed by a 2.1 Bcfd transportation contract with MGI Supply ltd (PEMEX Subsidiary).

Read - Net Midstream Plans Eagle Ford Pipeline from Mexico to Nueces County

“We were pleased to receive this timely authorization from FERC last week. Receipt of the Presidential Permit was an important regulatory milestone for NET Mexico.” said Joe Gutierrez, Co-President of NET. “Development and financing of the pipeline is on schedule, with mainline construction beginning in the first quarter of 2014, and mechanical completion in October.”

Much of the pipeline will be 42 inch pipe, but approval has been granted for a 48-inch pipeline into Mexico.

Read the full press release at netmidstream.com

Devon Energy Acquires Eagle Ford Assets From GeoSouthern for $6 Billion

November 20, 2013 R.T. Dukes

Devon Energy has agreed to acquire GeoSouthern Energy's Eagle Ford assets for $6 billion in cash.

The deal includes 82,000 net Eagle Ford acres in DeWitt and Lavaca counties, with associated production of 53,000 boe/d.

Current production is 56% oil, 20% NGLs, and 24% natural gas.

The properties hold an estimated resource potential of 400 million boe.

Devon has an average 50% interest in the properties and a 38% net revenue interest.

“With this transaction, we have secured a premier acreage position in the very best part of the world-class Eagle Ford oil play. This acquisition enhances our already strong North American portfolio by adding another low-risk, light oil asset that provides outstanding well economics and self-funded growth.”

— John Richels, CEO.

There is at least one producing well in each owned unit in DeWitt County and Devon expects EURs as high as 800,000 boe. The company estimates a drilling inventory of 1,200 locations and has a joint development agreement with BHP Billiton.

Devon expects annual growth of 25% from the assets for the next several years, with an ultimate peak of 140,000 boe/d.

The deal will be funded with cash on hand and borrowings.

Read the full press release at devonenergy.com

Rosetta Resources Has Yet To Complete 23% of Its Drilled Eagle Ford Wells

November 19, 2013 R.T. Dukes

Rosetta Eagle Ford Asset Map - June 2013

Rosetta Resources has completed 180 Eagle Ford wells and has 53 wells drilled and awaiting completion.

To put it another way - approximately 23% of the wells the company has drilled to date are sitting idle waiting to be completed.

Based on rough estimates, that means completion crews are a little more than six months behind drilling operations.

Even though an additional rig will be added in the fourth quarter, Rosetta is expected to begin working off the backlog of drilled wells as it transitions into 2014.

“Rosetta’s third quarter production results continued on a record pace and demonstrate our ability to maintain development of our core Eagle Ford position while integrating the Permian Basin assets into our operations....”

— Jim Craddock, CEO.

Rosetta's daily production was up 33% over the same quarter in 2012 and up 3% over the second quarter to 48,500 boe/d. The company operated five rigs in the third quarter and is expected to run six rigs in the fourth quarter. At Gates Ranch, the company will run 2-3 rigs.

The company's Karnes Trough leases are now fully developed.

Cotulla's Eagle Ford Growth Exhibited Through $9 Million Airport Expansion

November 18, 2013 R.T. Dukes

Ground has been broken on an $8-9 million La Salle County Airport expansion in Cotulla. The expansion will add over a mile of runway and additional airplane parking. The expansion is just one example of how Cotulla is changing with the Eagle Ford.

City officials hope to see additional investment from energy companies in the area. As the video states, more than $100 million has been invested in Cotulla to date and $200 million is not far way.

Eagle Ford Rig Count 261 - Cheniere Will Spend Billions in Corpus Christi - Nov 15, 2013

November 15, 2013 R.T. Dukes

Cheniere's Corpus Christi Liquefaction Project

The Eagle Ford Shale rig count held flat at 261 running this past week. Don't expect fourth quarter budgets to allow for big changes in rig activity. We're in the home stretch of the year and the major activity changes are likely on the shelf until 2014.

We heard more in regard the Cheniere Energy's Corpus Christi Liquefaction Project. The company has received a construction contract from Bechtel that pegs the cost of the proposed facility somewhere north of $11 billion. Expect a final investment decision from Cheniere late in 2014. Read the full story: Cheniere Energy's Corpus Christi LNG Plant will cost $12 billion

The U.S. rig count increased 8 rigs from 1,754 to 1,762 running over the past week. A total of 370 rigs are targeting natural gas (5 more than last week) and 1,385 (2 more than last week) are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 825 or 47% of rigs active in the U.S. are running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (223 rigs). The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

[ic-l]The natural gas rig count fell one to 29 rigs running over the past week. That's the first time the natural gas rig count has fallen below 30 since back in the spring. If our sources are correct and natural gas prices head higher this winter, November might be the last time you see the count that low. Natural gas prices were up about ten cents during the week and were trading around $3.65/mmbtu on Friday.

The oil rig count held flat at 230. WTI oil prices were trading around $94/bbl to end the week. Eagle Ford light crude traded at $90.25/bbl on Nov 14th.

A total of 227 rigs are drilling horizontal wells, 18 rigs are drilling directional wells, and 16 rigs are drilling true vertical wells. Karnes, DeWitt, La Salle, Gonzales, McMullen and Webb counties all have between 25 and 29 rigs running. See the full list of drilling by county below.

South Texas Oil & Gas News:

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Eagle Ford Shale Drilling by County

Eagle Ford Operated Rig Count By Company

SmithBits no longer reports its operated rig count, but we'll have updated number for you from a new source soon. Until then, you can reference our numbers from mid-April. There has not been a significant change in the overall rig count since this date:

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.