Magnum Hunter Files Chapter 11

December 16, 2015 Elizabeth Alford

Job Cuts Impact Eagle Ford — Magnum Hunter Files Chapter 11

Same song, different verse as another oil and gas company succumbs to the oil slump.

Magnum Hunter follows at least 18 other Texas companies this year who were forced to file for chapter 11. The company was significantly impacted by the recent and continued dramatic decline in both oil and natural gas prices and the general uncertainty in the overall energy market.

Magnum Hunter has been struggling for awhile, and sold a large chunk of its Bakken acreage in December of 2014. During the first quarter of 2015, the company suspended all drilling and said it didn’t expect to resume things had stabilized. The stability has been illusive and last month they warned the U.S. Securities and Exchange Commission that they might not be able to avoid seeking protection under Chapter 11 of the bankruptcy code.

“At a very challenging time for the entire energy industry, when many of our competitors have been forced to either file for bankruptcy without a plan to emerge in place or continue to attempt to restructure with creditors without an ‘end game,’ our global restructuring accomplishment is definitely an outlier. We expect the entire process to be efficient, cost effective, and quick. We also anticipate emerging from bankruptcy financially stronger than ever before.”

— Gary C. Evans, Chairman and CEO

Magnum Hunter began existing the Eagle Ford assets in 2013, selling 19,000 acres in Gonzales and Lavaca counties for $401 million. The remaining acres in Lee, Fayette and Atascosa Counties were sold toNew Standard in early 2014.

Trade Includes Eagle Ford Acreage

December 15, 2015 Elizabeth Alford

Rosetta-Noble Merger — Repsol & Statoil Deal

Two energy giants trade assets that will include acreage in the Eagle Ford.

Repsol and Statoil have agreed to a non-cash swap of worldwide operations including offshore interests in Brazil and the UK/Norway and onshore operations in the Eagle Ford Shale and Norway.

After the deal is complete, Statoil will acquire a 13% interest in the Eagle Ford joint venture from Repsol, becoming sole operator of the 118,000 net acres held by the JV. According to the press release, this move will allow for more optimal field development, efficient operations and cost savings.

“The first thing we have to assess, at least in my opinion, is to really gain efficiency in the Eagle Ford asset. Right now, to have two operators in the same asset doesn’t make much sense. So other than in operations, I think that we should reach agreements with Statoil in order to really improve the area.”

— Miguel Martinez San Martin, Repsol’s Chief Financial Officer

Repsol moved into the Eagle Ford with its acquisition of Talisman Energy in June 2015. The company is giving up this position in exchange for a 5% interest in the Gudrun Field on the Norwegian Continental Shelf.

Another Eagle Ford Bankruptcy

December 14, 2015 Elizabeth Alford

The Eagle Ford loses another operator as Energy & Exploration Partners become the 18th Texas oil driller to file for bankruptcy.

Energy & Exploration was founded in 2008 and owns about 61,000 net acres in Texas and Wyoming, including holdings in the Eagle Ford shale. The company was not able to bounce back from prolonged low crude prices and owed creditors tens of millions of dollars.

“We have taken this difficult, but necessary step in order to provide adequate time to complete ongoing discussions and processes with our lenders to restructure our balance sheet and create a strong financial foundation for the future.”

— Hunt Pettit, Energy & Exploration Partners’, CEO

This latest announcement has Energy & Exploration Partners joining many other Texas producers who have filed bankruptcy since the first the year including Sabine, American Eagle Energy, Quicksilver Resources, BPZ Resources, WBH Energy and Walter Energy. Analysts are warning that this is just the tip of the iceberg and many are forecasting bankruptcies will likely increase in the new year.

Haynes and Boone, LLP released a report that lists 36 bankruptcies nationwide in 2015 totaling about $13 billion in debt. See full report below.

Eagle Ford Rig Count Gained One

December 12, 2015 Elizabeth Alford

The Eagle Ford Shale rig count increased by one this week, ending with 89 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, school districts in the region face an uncertain future as tax revenues drop due to the downturn.

A total of 709 oil and gas rigs were running across the United States this week. 183 were targeting natural gas (nine less than the previous week) and 524 were targeting oil in the U.S. (21 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)324 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 below.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford are at 12 this week as natural gas prices declined slightly, trading at $1.99/mmbtu, a $.20 decrease from the previous week.

The Eagle Ford oil rig count rose to 77 with WTI oil prices ending the week at $35.62, an decrease of $4.35. A total of 80 rigs are drilling horizontal wells, one are drilling directional wells, and eight are vertical rigs. Karnes County leads the region in development with 18 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

Halcón Reports Q3 Earnings

Oil Theft Climbs 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.

Halcón Reports Q3 Earnings

December 9, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Halcón Q3 2015

Halcón Resources Corporation reported a climb in third quarter earnings with its Eagle Ford operations seeing important growth.

During a recent earnings call, Halcon executives said its bottom line advanced to $21.18 million during the third quarter of 2015, compared to the $10.87 million in last year's third quarter. The company also reports record levels of production of over 43,500 barrels a day.

Eagle Ford Operations

Halcón controls 101,000 net acres in the Eagle Ford shale formation. During the third quarter of 2015, the company operated one rig in El Halcón and spudded four wells and put three wells online.

“This play has really bloomed. I think there is more than 25 rigs running the play and there is a lot of good information coming out of it. Our current drilling program is designed to capture leases and hold acreage over the next 12 to 18 months. We’ll get that done. Once we can go to development mode and pad drilling, completed well costs are expected to decline by up to $1 million per well.”

— CEO, Floyd Wilson

Other highlights include:

Drilling days (spud to total depth) averaged 11.41 days per 3-string well during the third quarter of 2015, or 1,439 feet per day, representing an improvement of 32% compared to the third quarter of 2014.
Halcón set a new drilling record during the period by drilling a 3-string well in 9.70 days (spud to total depth), or 1,562 feet per day.
Halcón set a new record during the period by completing an average of five stages per day on a single well.
Plans to drill two-four wells per pad throughout the remainder of 2015 and in 2016.
Completed well cost is approximately $6.8 million for a three-string well.
Currently 102 Halcón-operated East Texas Eagle Ford wells producing and 3 Company-operated wells being completed or waiting on completion.