Twin Eagle Expands Eagle Ford Operations

June 25, 2015 Elizabeth Alford

Rosetta-Noble Merger — Twin Eagle Acquires StarMex Big Wells

Twin Eagle Resource Management announced this week it will acquire another 42 miles of pipeline in the Eagle Ford.

Houston-based Twin Eagle says the deal gives them 100 percent interest in StarMex Big Wells, LLC, a crude oil gathering system pipeline that connects to the major long-haul pipelines in the Gardendale area.

“The acquisition of StarMex Big Wells is exciting for the Twin Eagle brand as we continue to diversify our logistics and midstream offerings to our clients,” said Griff Jones, Twin Eagle’s chief executive officer. “We are looking forward to working with producers in the area to develop valuable gathering solutions to move their crude oil.”

The company's press release states that the pipeline system has capacity of 35,000 bopd and is backed by long-term, fee-based contracts with existing customers that are committed to ship approximately 24,000 bopd.

StarMex Big Wells will be renamed Twin Eagle Gardendale Pipeline, LLC.

While many companies have curbed spending during the downturn, others have taken advantage of new opportunities to expand their operations:

Enterprise Products Partners (EPD) will acquire Eagle Ford Shale (EFS) Midstream for a total price of $2.15 billion. Read more
Repsol completed its acquisition of Talisman Energy last month and became one of the largest companies in the energy sector worldwide. Read more
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. Read more

Read the press release at twineagle.com

Japan Eyes Eagle Ford Natural Gas

June 24, 2015 Elizabeth Alford

Natural gas from the Eagle Ford Shale may soon be making its way to Japan.

A delegation from the Consulate General of Japan is in Texas this week touring facilities in Freeport, Houston, Moulton and San Antonio as they look to the Eagle Ford as a potential source of much needed natural gas.

In 2011, Japan suffered a devastating earthquake that wrecked a great deal of its energy infrastructure, which centered on nuclear power. None of Japan’s nuclear reactors reactors have reopened since the quake and officials have turned to natural gas as a way to to generate electricity as an alternative to nuclear power.

While this seems like a win-win for all sides there are some serious administrative hurdles to getting Texas gas to Japan.

“Japan and the United States do not currently have a free trade agreement, which means that natural gas producers in Texas need to obtain an extra permit from the U.S. Department of Energy before they can ship natural gas to Japan.”

— Former Japanese Ambassador, Yasuo Saito

Many are looking to the Trans-Pacific Partnership to ease the burden and make trade possible. This will be important as our domestic production continues to outpace our demand. EIA analysts predict that America will transition from a net importer of natural gas to a net exporter by 2017 as we increase domestic production, which will reduce our demand for gas imports from Canada and support growth in exports to Mexico, Asia and Europe.

Birthday of 2014 Oil Crash

June 23, 2015 Elizabeth Alford

This week marks the birth of the 2014 oil crash and a closer look suggests that things aren't as bad as some predicted.

What started as a slow decline in June 2014 accelerated into a full-blown crash throughout the fall. When prices finally bottomed out in March, they had dropped by more than half from over $105.00 to $48.00.

By last December, uncertainty fueled the news machines and cries of doom became commonplace. Some analysts predicted possible economic ruin for oil-dependent states and others warned of the crippling of the industry.

But many seasoned oilmen saw the downturn as a wake up call of sorts and an opportunity for producers to take a hard look at their systems, processes, personnel, technology and strategies outside of the frenetic pace the boom required.

Cutting Costs: Over the last few month, producers have been forced to tighten their budgets and change their strategies in order to stay competitive. These tactics have worked well and first quarter results show many companies have been able to stay the course and gain strength by slashing costs associated with drilling through greater efficiencies and supplier reductions.

Sanchez reported Q1 costs at 30 to 40% below fourth quarter 2014
Matador reduced operating costs 30% to 40% for Q1
Continental’s drilling and completion costs fell by 15%
EOG announced it has benefitted greatly from the pull-back in activity and progress is being made to lowering cost in each phase of their operations

Innovation: Cutting edge producers are pushing the science and technology to new levels as they work to get the most out of their resources. These include advancements in 3-D seismic research, telemetry, remote guidance and innovations in CO2 or nitrogen-style completions.

“Oil production is becoming a modern manufacturing process. The frackers are engaged in ‘just-in-time’ production, analogous to the methods pioneered by Japanese manufacturers in the 1970s and 1980s, which led directly to hyper-efficient global supply-chain management perfected by Wal-Mart in the 1990s.”

— Wall Street Journal

Economic Impact: Thousands of jobs have been cut across all sectors of the industry, but both Texas and North Dakota report that the oil crisis has had minimal impact on their states. Data shows that Texas dipped in the first quarter but is already showing signs of a rebound and the North Dakota Department of Commerce boasts that the ND economy is still booming.

Dropping Rig Counts: The national and regional rig counts took a big hit this year as producers pulled rigs offline to save money. Many report that these wells are waiting in the wings and are ready to be put back into production later this year.

Record Production: Even in light of the price drop, production over the last 12 months has been at record levels. The EIA data published this month shows that global petroleum oversupply has more than doubled to 2.6 million bpd since the end of the second quarter last year and they expect the oversupply to last at least until 2017.

Eagle Ford Natural Gas up 349%

June 22, 2015 Elizabeth Alford

Eagle Ford Natural Gas May 2015 | click to enlarge

The Energy Information Administration reported last week that Eagle Ford Shale gas production increased by 349% in the past eight years, even as rig counts plummeted.

In May 2007, the region was producing 1.63 Bcf per day with less than 100 rigs, and one year ago 260 drilling rigs were producing around 6.2 Bcf per day. In May 2015, the region produced a record 7.33 Bcf per day while running about 120 rigs.

“At the start of 2014, the Eagle Ford was producing less gas than either the Barnett or the Haynesville. However, as of June 2015, Wood Mackenzie estimates that the Eagle Ford is producing approximately 5.2 bcfd of gas, which is 34% more than the Barnett and 15% more than the Haynesville.”

For the first time in many months, Webb County has taken over Texas top gas production spot for the month of March, producing 55,645,145 MCF compared to Tarrant County’s 53,003,565 MCF.

Eagle Ford is quickly gaining ranks as a major natural gas producer with companies such as Anadarko, Chesapeake, Swift and Rosetta growing production as they successfully reduced cycle times and maximize scale in the play.

Eagle Ford Rig Count at 115

June 20, 2015 Elizabeth Alford

NOAA Studies Eagle Ford Emissions — Eagle Ford Rig Count Increases

The Eagle Ford Shale rig count increased by one to 115 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, 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.

The U.S. rig count slowed its decline this week falling by two to 857 rigs running by midday Friday. A total of 223 rigs were targeting natural gas (dtwo more than the previous week) and 631 were targeting oil in the U.S. (four 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 another four to 26 this week and natural gas prices traded at $2.82/mmbtu, an increase of $.06 from the previous week.

The oil rig count decreased by three to 89with WTI oil prices moving down this week to $59.61, an $.37 decrease. A total of 109 rigs are drilling horizontal wells, one rigs are drilling directional wells, and five are vertical rigs. LaSalle led the Eagle Ford count with 20 rigs, while Karnes (19), Webb (16) and DeWitt (16)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

Pipeline Explodes in DeWitt County

EP Energy Expands Operations

Karnes County Explosion Proves Costly

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.