Eagle Ford Gas Headed to Mexico

March 30, 2015 Elizabeth Alford

Petróleos Mexicanos announced Friday that is has acquired the funding to complete the construction of the pipeline Los Ramones II for an estimated $900 million.

The deal was a collaboration between Blackrock and First Reserve will be one of the first projects for Mexico’s historic energy reform that will enable a low-cost energy supply and create jobs. The first part of this project, the Ramones I, ranges from Eagle Ford in Texas to Los Ramones, Nuevo León and phase II will reach Guanajuato to supply the central and western parts of the country.

“Participation of the private sector in infrastructure will be very important in Mexico, and around the world. Given the recent reforms, growth in Mexico and economic stability, investment opportunities in Mexican infrastructure have definitely drawn our attention and we hope to explore other opportunities in the near future.”

— Jim Barry, CEO of the Infrastructure Investment Group of BlackRock

The terms of the deal commit BlackRock to $4.6 billion and First Reserve to $30 million over 25 years and gives them a combined 45 percent control of the project.

Mexico’s rising demand for natural gas has created a lucrative export industry for Eagle Ford producers in recent years. The country hopes to lessen its dependence on other sources by tapping into its own shale oil and natural gas within the next five to 10 years.

Eagle Ford Rigs Down to 153

March 27, 2015 Elizabeth Alford

The Eagle Ford Shale rig count decreased by three to 153 rigs running across our coverage by midday Friday.

In recent Eagle Ford news, TxDOT reveals that Texas oil regions saw a surge in traffic deaths in 2014 including 272 people who died in traffic accidents in the Eagle Ford. Roadways have continued to deteriorate over the past few years as more traffic and heavy trucks damage roads and make for unsafe conditions.

The U.S. rig count fell another 21 to 1048 rigs running as of today. A total of 233 rigs were targeting natural gas (down nine from the previous week) and 814 were targeting oil in the U.S. (41 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)462 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. 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

Natural gas rigs declined by three to 13 rigs by midday Friday. Natural gas prices decreased $.18 from the previous week at $2.61/mmbtu on Friday afternoon.

The oil rig count remained flat at 137 rigs running by midday. WTI oil prices increased $4.33 from the previous week, trading at $50.05/bbl on Friday afternoon and EF light ended up $5.75 at $48.00. A total of 144 rigs are drilling horizontal wells, two rigs are drilling directional wells, and vertical rigs fell to four. Karnes (24), DeWitt (21), and Webb (19)and LaSalle (17), have the highest rig counts this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Chesapeake to Reduce Spending by $500 Million

Enlink Midstream Aquires Pipeline Company

Talisman Energy Cuts Jobs

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.

Enlink Midstream Aquires Pipeline Company

March 26, 2015 Elizabeth Alford

Enlink Midstream Partners announced Monday it will acquire Victoria Express Pipeline (VEX) from Devon, giving the new company a “strategic footprint” into the Eagle Ford Shale play.

Eagle Ford Traffic Deaths Increase 13%

March 25, 2015 Elizabeth Alford

I-37 Gravel Road Frontage in Live Oak County - TxDOT — Gravel Road In The Eagle Ford

Texas oil regions saw a surge in traffic deaths in 2014 including 272 people who died in traffic accidents in the Eagle Ford. According to TxDOT, this is an increase of 13 percent over 2013, where 240 people were killed in the 26-county region.

Overall in the Eagle Ford last year, there were 3,658 traffic accidents in which people were killed or seriously injured, up from 3,446 the year before. This is a high percentage of the 8,600 accidents reported statewide.

Roadways have continued to deteriorate over the past few years as more traffic and heavy trucks damage roads and make for unsafe conditions. Over the years, several several efforts have been put into place to address the road conditions including assembling a task force in 2012 and TxDOT’s Be Safe. Drive Smart. campaign that was launched over the summer.

“The number of deaths have increased. We want to remind folks, especially in the energy sector areas, to watch out for those 18-wheelers. And the same message to those in the 18-wheelers, ‘Watch out for vehicles.’ ”

— TxDOT Spokeswoman, Laura Lopez

The San Antonio New Express reports that there is a recent surge in road construction across the oil regions to improve conditions and make things safer. Several projects underway in the Eagle Ford include repairs of $5.8 million to Texas 97, FM 1099 and FM 1344 in Wilson and Atascosa counties as well as widening and repair of FM 1916 in Dimmit County at a cost of $999,000.

Chesapeake to Reduce Spending by $500 Million

March 24, 2015 Elizabeth Alford

Chesapeake Energy announced on Monday it plans further cuts to its 2015 capital spending. The company will reduce spending, cut rigs and slow production in order to navigate the current low crude pricing environment.

For 2015, Chesapeake will spend $3.5 billion to $4 billion, a $500 million reduction from its last update in February.

Other important spending updates include:

Plans to spud and connect to sales approximately 520 and 650 gross operated wells, respectively, in 2015 (a decrease from 1,175 and 1,150 wells in 2014)
Connect to sales approximately 650 gross operated wells, respectively, in 2015 (a decrease from 1,175 and 1,150 wells in 2014).
Lowering its targeted 2015 production to 231 236 million barrels of oil equivalent, or average daily production of 635 645 thousand barrels of oil equivalent, which represents 1 3% production growth over the prior year after adjusting for 2014 asset sales.

“We entered 2015 with a strong liquidity position and we intend to manage it prudently. In response to continued weak commodity prices, we are further reducing capital expenditures and associated drilling activity. As a result, we now forecast ending 2015 with approximately $6 billion in combined cash and borrowing capacity under our credit facility. With this budget revision we anticipate being free cash flow neutral by the end of 2015.”

— Doug Lawler, Chesapeake’s Chief Executive Officer

Legal trouble continues to plague Chesapeake. In January, the company agreed to pay $119 million to settle a class action suite from 2013 that included thousands of royalty owners involving possibly 10,000 wells. And, most recently, a group of landowners in Bradford County, PA filed a suit alleging that Chesapeake and Williams Partners violated antitrust laws by conspired to restrain trade in the market for gas gathering services. Read more here.

Chesapeake Energy is active all across the Eagle Ford including Atascosa County, Dimmit County, Duval County, Frio County, Goliad County, LaSalle County, McMullen County, Washington County, Webb County and Zavala County.