Karnes County Explosion Proves Costly

June 18, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Encan Corp Q1

Almost one month after a fiery oil rig explosion in Karnes county, Encana Corp released final figures to state regulators.

Encana Corp. reported that the accident released over 760,000 pounds of crude oil and possibly tens of thousands of pounds of gas and into the air. The company estimates that the crude was worth more than $197,000.

The county sheriff called the May 19th accident the ‘worst environmental disaster in more than 20 years’, leaving trees, fields, roads and houses covered in oil and displacing numerous families.

The clean up has been a massive effort and has included subcontractors to control runoff, pump out nearby stock tanks, evaluate livestock, take soil samples, evaluate vegetation, clean homes and repair nearly half a mile of roadway on FM 792.

First quarter results for Encana show improved production and lower costs for its Eagle Ford operations. Highlights include:

Drilled its fastest three wells to date and reduced normalized drilling costs by 15%
Reduced drilling and completion costs by $1 million per well
Promising early results from new wells in an area known as the Graben
Base optimization efforts reduced decline rates by 50%
27 net wells were drilled
Liquids production averaged 36,000 bbls/d

EP Energy Expands Operations

June 17, 2015 Elizabeth Alford

Houston -based EP Energy plans to expand its presence in the Eagle Ford by adding new training, office and warehouse space to its operations in Dilley.

EP Energy currently holds over 91,000 acres in the Eagle Ford with activity in La Salle and Atascosa counties. In addition to adding 8,300 square feet of work, the $1.3 million construction project will likely add new jobs to the area.

The company reported strong first quarter results for its Eagle Ford operations and touted improved well performance and significantly lowering well costs. Additionally, about two-thirds of the Q1 capital was allocated to the Eagle Ford program.

“We also continue to see execution improvements. We have reduced our average drilling cycle times from 10 days to 9 days and this is in an asset that we have been drilling in for over five years. Our 40-acre development is driving cost efficiencies, due to the use of three and four well pads. Importantly this development is improving our reserve recoveries per section which results in improved returns from our capital program.”

— Clay Carrell - COO

Q1 Highlights for Eagle Ford:

Completed 38 wells across its Eagle Ford program
Grew oil production to 38.0 MBbls/d, a 20 percent increase compared with the same period in 2014
Total equivalent production was 54.7 MBoe/d, an 18 percent increase compared with the same period in 2014
Reducing the midpoint of our per unit cost ranges by over 5%
Reduced the average drilling cycle times from 10 days to 9 days

Pipeline Explodes in DeWitt County

June 16, 2015 Elizabeth Alford

Karnes County Well Explosion — DeWitt County Pipeline Explosion

An underground pipeline belonging to Energy Transfer Partners exploded late Sunday in DeWitt County near the town of Cuero.

The explosion sparked a massive fire and caused several area homes to be evacuated as a precaution. There were no injuries and all residents were able to return home safely.

Clean-up from the blast will involve crews replacing sections of the pipeline that were damaged. include repairs on a stretch of roadway that melted under the heat of the fire as well as

“Sheriff Zavesky said the fire died down around 11:30 pm Sunday, but a trench where the affected pipeline was buried could still be seen smoldering on Monday afternoon.”

— The San Antonio Business Journal

Officials from Texas Railroad Commission, Energy Transfer Partners and county officials are investigating the accident.

This is the second explosion of its kind in the Eagle Ford since the beginning of the month. An accident at an Encana Corp well last month is still wreaking havoc on a small area of Karnes County.

Producers Defend Fracking Practices

June 15, 2015 Elizabeth Alford

4.0 Quake Hits North Texas — RCC Studies Texas Quakes

XTO and Enervest were summoned to Austin last week to try and persuade the Texas Railroad Commission that their operations are not to blame for recent earthquakes in North Dallas.

This unusual request was a result of a highly-publicized and debated study conducted by SMU researchers that concluded two specific wastewater injection wells are likely the cause of a rare string of earthquakes over the last few years (more here). Though the public seems convinced of this causal link, Railroad Commissioner Ryan Sitton said publicly he is 'unconvinced'.

XTO, a subsidiary of ExxonMobile, presented mounds of evidence to defend their fracking practices including more than 30 exhibits, dozens of slides, and three expert witnesses. The company argued that the unusual seismic activity was a natural occurrence and in hopes that the RRC from shutting down their wells.

“The earth has been moving continuously over time, and that movement is the result of natural tectonic forces far away but that express themselves right here.”

— Tim George, Attorney for XTO

This is the first time the commission has required a company to prove it’s not to blame for earthquakes. Recent policy changes now allow the agency to revoke permits if wells are linked to earthquakes.

Enervest is expected to put on its case today and tomorrow.

You can watch the hearing at rrc.com

Eagle Ford Rig Count Holds Steady

June 12, 2015 Elizabeth Alford

EFS Rigs Decrease — Eagle Ford Rig Count at 114

The Eagle Ford Shale rig count stayed flat this week with 114 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, scientists met with Railroad Commissioner Ryan Sitton and other officials for a technical discussion about the science behind a recent study that links fracking and earthquakes.

The U.S. rig count fell by nine, ending with 859 rigs running by midday Friday. A total of 221 rigs were targeting natural gas (down one from the previous week) and 635 were targeting oil in the U.S. (seven less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)363 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 in the Eagle Ford rose by three to 22 this week and natural gas prices traded at $2.76/mmbtu, an increase of $.17 from the previous week.

The oil rig count decreased by three to 92 with WTI oil prices moving upwards this week to $59.98, an $.85 increase. A total of 110 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and four are vertical rigs. LaSalle moved ahead this week and is running 21 rigs, while Karnes (19), Webb (17) and DeWitt (17)following closely. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Texas Outranks OPEC Nations

Eagle Ford Shale Midstream Sold

Karnes County Accident Worst in 20 Years

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.