Eagle Ford Rig Count Drops by Three

October 2, 2015 Elizabeth Alford

The Eagle Ford Shale rig count fell by three this week to 100 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, controversy is brewing over whether the state should continue to drill for oil and gas on public University Lands.

The U.S. rig count plunged by 29 this week, ending with 809 rigs running by midday Friday. A total of 195 rigs were targeting natural gas (one more than the previous week) and 614 were targeting oil in the U.S. (26 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 fell are at 14 this week as natural gas prices traded at $2.47/mmbtu, a $.09 decrease from the previous week.

The oil rig count is at 86 and WTI oil prices ended the week at $45.66, a decrease of $.04. A total of 87 rigs are drilling horizontal wells, two are drilling directional wells, and eight are vertical rigs. Karnes County leads the region in development with 21 rigs 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

Federal Fracking Rules Halted

Eagle Ford Sets Record for Lonestar

Downsizing in the Eagle Ford

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.

Federal Fracking Rules Halted

October 1, 2015 Elizabeth Alford

Chesapeake Before Texas High Court — Fracking Ruling Blocked

The Obama Administration suffered a setback this week in its fight to add stricter regulations to the oil and gas industry for hydraulic fracturing (fracking).

On Wednesday, U.S. District Judge Scott Skavdahl issued a preliminary injunction effectively halting the efforts to add tighter regulations for fracking on public land.

The case before Judge Skavdahl combined two separate challenges from industry groups and several states who have filed lawsuits. All parties challenging the ruling stated that the Bureau of Land Management (BLM) did not follow federal rule-making law and exceeded their authority. The groups also claim these additional rules aren’t necessary because the EPA has already granted authority to the states to monitor and protect underground water sources.

“House Committee on Natural Resources Chairman Rob Bishop (R-UT) told cnbc that regulations would “cause major harm to states, industry, and the American people if implemented.”

At question are the new regulations proposed in March by the Bureau of Land Management in March. The rules came after a four-year investigation that included over 1.5 million public comments. If it moves forward, the fracking rule would require:

A validation of well integrity in order to protect groundwater supplies
Companies to publicly disclose chemicals used in hydraulic fracturing through the website FracFocus, within 30 days of completing fracturing operations
Higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife
Companies to submit more detailed information before fracking to reduce the risk of cross-well contamination

Eagle Ford Sets Record for Lonestar

September 30, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Lonestar Reports Record Quarter

Lonestar Resources announces record Eagle Ford Shale production for the third quarter of 2015.

Related: Shale Industry Shake-Up

In a press release this week, Lonestar Resources reported a net production for the third quarter of 2015 averaging 6,500 BOE per day, which represents a 39% increase over prior year results and a 12% increase over second quarter 2015 results.

Lonestar has focused much of its resources on 34,360 acres in the Eagle Ford Shale. These operations are breaking production records for the company, including approximately 48% year‐over‐year in the third quarter of 2015, and 15% sequentially over 2Q15 results.

While heralding this great news, Lonestar executives are careful to point out that expenditures reflect the company's commitment to a disciplined approach.

“Lonestar’s continued growth in this difficult environment is confirmation that our team is executing at a high level, bringing wells onstream within budget and at production rates that exceed our forecast. Moreover, this growth is being achieved with capital discipline and balance sheet management, which is critical in the current macro backdrop.”

— Lonestar’s Chief Executive Officer, Frank D. Bracken, III

In July, Lonestar agreed to a joint development agreement (JDA) with Dallas’ IOG Capital LP. which will add an $100 million for its Eagle Ford drilling efforts fund and develop additional farm-in opportunities such as Horned Frog, a 3,614-acre leasehold recently acquired in La Salle County, Texas.

Fracking Ban: A Disaster for Texas Universities

September 29, 2015 Elizabeth Alford

Controversy is brewing over whether the state should continue to drill for oil and gas on public University Lands.

A report released earlier this month by Austin-based Environment Texas Research and Policy Center and the California-based Frontier Group called for an end to oil and gas drilling, citing that 95% of the leases involve the controversial technique of hydraulic fracturing (fracking). They claim that fracking hurts the environment and threatens public health.

Pro industry supporters are expressing outrage, saying a halt to drilling would be "disastrous for the University system and the Texas economy."

If Environment Texas gets what it wants, it would mean a severe cut in the revenue stream for higher education in Texas. Alyssa Ray, marketing and corporate strategy analyst said that oil and gas leases from University Lands brought in more than $1.1 billion in 2014 compared to $589 million in tuition from more than 50,000 UT students in 2011.

“Please stand with us by defending continued oil and natural gas development on University Lands (...) These funds have allowed the universities to keep tuition affordable and make investments in new facilities. Now, a liberal environmental group is calling for a de facto end to drilling on lands that benefit both UT and A&M.”

— North Texans for Natural Gas, Petition Plea

Downsizing in the Eagle Ford

September 28, 2015 Elizabeth Alford

Rosetta-Noble Merger — Sanchez Sells Eagle Ford Assets

Sanchez Energy Corp joins the ranks of other shale producers who are doing whatever is necessary to survive in this downturn.

In a press release today, Sanchez confirmed that it is selling approximately 150 miles of midstream gathering lines and associated midstream infrastructure in the Eagle Ford in order to gain much-needed cash. Sanchez Production Partners will acquire and operate the assets concentrated in four gathering and processing facilities. Both firms are run by the private Sanchez Oil & Gas Corp.

The sale is expected to close next month and will bring Sanchez $618 million cash on hand, which they will use to buy assets, lease more property and accelerate drilling. The company anticipates that this agreement will result in an increase in lease operating expense of approximately $1.95 per barrel of oil equivalent.

Many Eagle Ford producers are selling assets and making deals in order to survive. Just last week, U.S. oil producer, Alta Mesa Holdings, announced it will exit from the Eagle Ford by selling Alta Mesa Eagle, LLC to EnerVest for $125 million.

Sanchez Energy CEO Tony Sanchez III said the company may sell other Eagle Ford assets as needed.

“We anticipate that we will see additional opportunities to accelerate returns through midstream and other asset monetization strategies like the one announced today.”

Read the press release at sanchezenergycorp.com