NuStar Announces Open Season

April 6, 2015 Elizabeth Alford

NuStar: South Texas Crude Pipeline System

NuStar energy announced this week that it has opened up space for new shippers in its South Texas Crude Oil Pipeline System during an open season scheduled for April 2-23rd.

During these open seasons, shippers can reserve space in a pipeline by promising a long-term financial commitment to the project. NuStar’s current project is a new origin point to enter the South Texas Crude Oil Pipeline System and is located at highway 99 in McMullen County. This location will provide space for an additional 10,000 barrels per day to potential shippers.

Interested shippers seeking pipeline space in Eagle Ford Shale can receive more information about rates, service and routes by contacting Rick Webb, Vice President-Business Development, at 210.918.2000.

NuStar Energy is based in San Antonio and is one of the largest independent liquids terminal and pipeline operators in the nation. The company’s South Texas Crude Oil Pipeline System consists of over 200 miles of crude transmission and gathering lines throughout Texas including from LaSalle, McMullen, Frio and Live Oak Counties.

Eagle Ford Rig Count Remains Steady

April 3, 2015 Elizabeth Alford

The Eagle Ford Shale rig count remained flat this week ending at 150 rigs running across our coverage by midday Thursday.

In recent Eagle Ford news, the Texas legislature has introduced legislation in both houses that would remove local control over oil and gas activities within cities give it back to the states. The “Denton Fracking Bill” (SB 1165) unanimously passed and asserts that current statutes are already so effective that additional local regulations aren’t necessary.

The U.S. rig count fell another 20 to 1028 rigs running as of today. A total of 211 rigs were targeting natural gas (down 11 from the previous week) and 812 were targeting oil in the U.S. (1 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)456 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 saw no change and totals 13 rigs. Natural gas prices decreased $.10 from the previous week at $2.71/mmbtu on Friday afternoon.

The oil rig count remained flat at 137 rigs running by midday. WTI oil prices decreased $.91 from the previous week, trading at $49.14/bbl on Friday afternoon and EF light fell $.25 to $47.75. A total of 144 rigs are drilling horizontal wells, two rigs are drilling directional wells, and vertical rigs are at 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 Before Texas Supreme Court

Oil Export Ban Hurts Eagle Ford

Eagle Ford Gas Headed to Mexico

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.

Chesapeake Before Texas Supreme Court

April 2, 2015 Elizabeth Alford

Chesapeake Energy is back in the news again for continued disputes over royalty payments. This time, the company stood before the Texas Supreme Court to challenge a 2014 Appeals Court ruling that would cost them at least $1million.

At the heart of the case is the property owners (Hyders) allegations that Chesapeake improperly deducted money from their royalty checks to cover post-production costs. They say that the problems began after Chesapeake bought their lease from another company in 2006 and have since continued to alter their interpretation of their obligations outlined in the lease.

In 2010, the Hyders finally sued Chesapeake for improperly subtracting postproduction costs from their royalty checks for gas taken from their own property. In 2012, state District Judge Melody Wilkinson awarded the family nearly $1 million and the decision was upheld last year by the 4th Court of Appeals in San Antonio.

The case is being watched closely by property owners and by the oil and gas industry, many who believe this decision can fundamentally change change in Texas oil and gas law.

In Texas, mineral owner have a four-year stature of limitations in which to file a lawsuit to dispute royalty payments and many are racing to the lawyers.

“this is one of a long line of cases in which Chesapeake has sought to profit at the expense of royalty owners.”

— National Association of Royalty Owners-Texas

Attorneys George Parker Young and Dan McDonald are just two who are getting ready to come after Chesapeake. The attorneys expect to file up to 400 lawsuits by the end of the year that could name as many as 40,000 plaintiffs.

Oil Export Ban Hurts Eagle Ford

April 1, 2015 Elizabeth Alford

Matador Pulling Two Rigs in the Eagle Ford in 2015 — Eagle ford

A new study from Rice University reveals that the decades-long oil export ban is having the greatest impact on producers in the Eagle Ford Shale region of Texas. The study takes a unique look at the dozens of crude types on the open market and tries to calculate their potential prices in the absence of trade barriers.

The oil that is pumped out of the Eagle Ford has less sulpher than WTI or Brent and would attract a higher price on the international market.

According to the report, the U.S. refining infrastructure isn't designed to handle the domestic crude qualities that are in abundance today, which has caused prices to be lower relative to internationally traded crudes.

“If the ban were lifted, it would immediately allow the sale of domestic crude oils into the international market, where prices reflect differences in crude quality and therefore would be higher for the light crude oils being produced from shale plays.”

— Ken Medlock, Rice University's Baker Institute for Public Policy

Earlier this month, IHS issued a report on the implications of the current ban and concluded that lifting the export ban could create hundreds of thousands of additional U.S. jobs and add billions to the U.S. economy. The report goes on to say that eliminating the ban will have far-reaching consequences for the U.S. economy including:

Further increases in domestic oil production
Lower gasoline prices
964,000 additional jobs
Benefits to manufacturing and service-related sectors in every state
Strengthening national security and America’s position in the world

Fracking in Texas Cities: Who's the Boss?

March 31, 2015 Elizabeth Alford

When it comes to drilling oil in Texas, all cities aren’t created equally. Laws and regulations vary from town to town and what is okay in one, might be illegal in another. So, who ultimately gets to decide the rules for fracking in Texas cities?

Since the city of Denton outlawed drilling within the city limits in 2014, the debate over who has the authority to regulate the oil and gas industry has heated up. In recent weeks, the Texas legislature has introduced legislation in both houses that would remove that control from local governments and give it back to the states.

Related: Fracking Bans in Texas?

SB 1165 and HB 40 both favor state control that would would limit a city's ability to impose regulations on oil and gas industry activities. The “Denton Fracking Bill” (SB 1165) unanimously passed and asserts that current statutes are already so effective that additional local regulations aren't necessary . It goes on to say that the act would further "preempt regulation of oil and gas operations by municipalities and other political subdivisions."

“The threat to Texas and our state’s biggest economic driver, oil and gas, is real and it’s urgent,” Staples said in his remarks. “This is the very sector that is building our schools, paving our roads and funding our universities. Please make no mistake, this attack is growing and it must be fixed. We join Texans who support local control, but local control does not mean out-of-control.”

— Todd Staples, President of the Texas Oil & Gas Association

Reactions have been swift from local officials, environmental groups and private citizens. The Texas Municipal League was one agency that blasted the decision saying that if city ordinances are nullified, homeowners could be robbed of their property values overnight and would be stripped of their property rights.