Magnum Hunter Signs Option To Sell Pearsall & Eagle Ford Assets ~$25 Million

December 12, 2013 R.T. Dukes

Magnum Hunter (MHR) has granted New Standard Energy, an Australian company, the option to acquire Pearsall Shale and Eagle Ford Shale assets in Atascosa County.

New Standard paid $75,000 for the option and will pay an additional $15 million in cash and $9.5 million in equity.

In total, Magnum Hunter will receive a little less than $25 million for ~5,200 net acres and 300 boe/d of production from five wells. New Standard has until January 21, 2014, to exercise the option.

The deal is part of ~$700 million in divestitures that will allow the company to focus on development of assets in the Marcellus and Utica shales.

“Our ability to grow both production and reserves at the highest internal rate of return within our existing asset base, undoubtedly lies in our acreage position located in the Utica and Marcellus Shale resource plays.”

— Mr. Gary C. Evans, CEO

Also read:Magnum Hunter Completes PVA Deal - Still Targeting the Eagle Ford and Pearsall

Magnum Hunter plans to spend $400 million in 2014, with $260 million allocated in the Utica and Marcellus, $50 million planned in the Bakken, and $90 million spent on midstream infrastructure.

If the option is exercised by New Standard Energy, this deal likely ends Magnum Hunters upstream activity in the Eagle Ford and Pearsall completely.

Marathon Increases Its Eagle Ford Resource Estimate to 1 Billion Barrels

December 11, 2013 R.T. Dukes

Marathon Eagle Ford and Austin Chalk Development Plan

Marathon Oil has increased its total resource estimate for the Eagle Ford from 469 million barrels initially to ~1 billion boe today.

The company will run 18 rigs throughout 2014 in the the Eagle Ford.

In addition, Marathon will pursue developing both the Austin Chalk and Eagle Ford in the area.

Development will look more like what we see operators doing in North Dakota where they target the Bakken and Three Forks from single pads.

In areas prospective for both plays, two wells targeting the Austin Chalk and three wells targeting the Lower Eagle Ford will be drilled from a single pad. Further testing in the first half of 2014 will determine how widely this method of development can be applied.

“When you look at the three priorities for our 2014 business plan - accelerating our rig activity in three of the highest-value domestic resource plays, ......we believe they definitively reinforce our stated strategy of creating long-term shareholder value and a commitment to rigorous portfolio management integrated with robust capital allocation.”

— CEO Lee Tillman.

Capital Budget Focused on Liquids Growth in North America

Marathon Oil will spend $5.9 billion in 2014, with approximately 60% ($3.6 billion) directed at developing liquids-rich assets in North America.

A total of $2.3 billion will be spent in the Eagle Ford to drill 385-405 gross (250-260 net) wells. Almost 90% of the company's activity is operated. $225 million, which is included in the $2.3 billion, will be spent on pipelines and centralized production tanks (batteries).

[ic-l]Marathon will spend just over $1 billion in the Bakken and more than than $200 million in the Oklahoma Woodford. Combined with the Eagle Ford, the plays account for almost all of Marathon's North American resource play investment in 2014.

Production from the company's three core resource plays will surpass 175,000 boe/d in 2014, with the Eagle Ford contributing approximately 120,000 boe/d

Read the full press release at marathonoil.com

Alamo Colleges & Weatherford Get $1.5 Million to Train Eagle Ford Oilfield Workers

December 10, 2013 R.T. Dukes

Alamo Colleges and Weatherford TWC Grant Check

The Texas Workforce Commission is providing a $1.5 million skills development grant to fund the training of 673 new oilfield workers and 300 existing Weatherford employees. Alamo Colleges will train field technicians and engineers that will earn approximately $15-20/hr.

Jobs currently available across the play include CDL drivers, Logistics Coordinators, Mechanics, Sales Roles, Technicians, and more - Search Avalable Eagle Ford Jobs Here.

Abraxas Petroleum Sells Eagle Ford Acreage in McMullen County to Redman Resources - $73 Million

December 9, 2013 R.T. Dukes

Abraxas Eagle Ford Map - Pre WyCross Sale

Abraxas Petroleum is selling Eagle Ford acreage and production in the company's WyCross area in McMullen County for $73 million.

The deal includes ~1,200 net acres from a 25% working interest in 5,986 gross (4,809.5 net) acres and net production of 655 boe/d (~90% oil). Proved reserves on the property were estimated at 3.7 million boe.

Abraxas retained ~4,000 net acres near Jourdanton in Atascosa County and ~400 net acres in the Cave area in McMullen County. Abraxas recently completed its second well on its Jourdanton area acreage and is in the process of drilling its first well in the Cave area in McMullen County.

“...Although the WyCross properties were certainly of the highest quality, they carried a low working interest and are now non-operated. We continue to identify additional lease blocks available in our targeted regions of the Eagle Ford and expect to be in a position to announce additional Eagle Ford acreage acquisitions in the near future.”

— Bob Watson, CEO

Abraxas Petroleum WyCross Eagle Ford Acreage Map - McMullen County

Mr. Watson also stated the company will focus on its high quality, operated assets. Abraxas was not the operator on the WyCross acreage and held a minority (25% WI) interest in the development.

Abraxas is expected to use the proceeds to pay down the company’s bank line and redeploy capital into operated lease blocks in the Eagle Ford and Bakken.

Read the full press release at abraxaspetroleum.com

Eagle Ford Rig Count 265 - Forest Plans to Double Eagle Ford Output in 2014 - Dec 6, 2013

December 6, 2013 R.T. Dukes

Forest Oil Eagle Ford Acreage Map Year-end 2013

The Eagle Ford Shale rig count held flat at 265 rig running over the past week. The natural gas rig count rebounded from an Eagle Ford era low of 23 to 26 running this week and the oil rig count fell from it's all-time high of 241 to 238.

Forest Oil released its 2014 capital budget and provided production guidance this week. The company plans to spend 77% of its $290-310 million capital budget in the Eagle Ford and expects production from the play to double over the next 12 months.

Forest will operate three rigs in the region next year. Read more in the article: Forest Oil Will Double Oil Production in 2014 - Securing Eagle Ford Acreage

The U.S. rig count increased 12 rigs from 1,763 to 1,775 running over the past week. A total of 375 rigs are targeting natural gas (8 more than last week) and 1,397 (6 more than last week) are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 842 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 (226 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 bounced off an Eagle Ford era low of 23 to 26 rigs running over the past week. At this time in 2012, there were more than 60 rigs and in 2011 there were more than 90 rigs targeting natural gas in the area. Natural gas prices were up again, about 10% over the past two weeks, trading around $4.10/mmbtu on Friday. With the current cold, prices could stay around $4 or higher until spring.

The oil rig count decreased three rigs from the all time high hit for the second time last week to settle at 238 rigs running. WTI oil prices were up ~5% and trading above $97/bbl at the end of the week. Eagle Ford light crude traded at $93.75/bbl on Dec. 5th.

A total of 231 rigs are drilling horizontal wells, 18 rigs are drilling directional wells, and 16 rigs are drilling true vertical wells. Karnes, DeWitt, La Salle, McMullen and Webb counties all have between 25 and 31 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.