TxDOT: $569 Million Needed for Eagle Ford Roads

TxDOT says it needs to spend $569 million to improve Eagle Ford roadways, according to a presentation released by the agency.

Related: Eagle Ford County Roads a Mess

In small towns all across the Eagle Ford, oil and gas activity has left a mess of the county roads system. Poor road conditions, increased traffic and heavy equipment brought on by the oil boom have contributed to the unsafe conditions.

In March, TxDOT began a new initiative to address these issues state-wide in hopes to provide safety enhancements on roadways across the state’s energy regions.

The improvements will include:

  • Strengthening pavement structures
  • Adding shoulders to protect pavement edges
  • Adding turn lanes at key intersections
  • Constructing passing lanes on Super 2 corridors
TxDOT districts have identified energy sector projects, by prioritizing corridor segments that cross multiple districts, directly connect energy sector activity nodes or have high frequencies of injury or fatal crashes. TxDOT categorized these identified corridors into Priority 1 and Priority 2 groups based on the improvements needed. The table shows current estimates for Priority 1 funding needs in the five major energy sector regions.
— TxDOT's Website

Eagle Ford Shale corridor priorities include:

  • SH 97 (LRD, SAT, YKM)
  • SH 72 (CRP, YKM)
  • US 83 (LRD, SAT)
  • US 59 (LRD, CRP, YKM)
  • SH 16 (SAT, LRD)
  • SH 85 (LRD, SAT)
  • US 183 (CRP, YKM)
  • US181/SH123 (CRP, SAT)

Roads in the Eagle Ford Shale are under intense pressure from the huge volumes of truck traffic that are regularly running up and down South Texas highways – literally hundreds of trips per day in many cases. And, often, the counties have not been able to keep up with the problems caused by the increased volume.

Read the full presentation here

More Eagle Ford LNG Headed Abroad

LNG Exports Headed to non-Free Trade Countries

LNG Exports Headed to non-Free Trade Countries

Federal officials give the go-ahead for one Texas refinery to ship Eagle Ford LNG around the world.

Related: Natural Gas Will be a Boom for Eagle Ford Companies

The U.S. Department of Energy has authorized Flint Hills Resources to export liquefied natural gas (LNG) to countries that do not hold a free trade agreement (non-FTA) with the U.S. The order allows Flint to export LNG 3.62 billion cubic feet of natural gas per year over the next 20 years.

Flint Hills plans to purchase the LNG from Stabilis LNG, which is located in Live Oak County.

In April, the U.S. Senate passed the Energy Policy and Modernization Act designed to increase U.S. exports of liquefied natural gas (LNG).

Exporting our surplus natural gas overseas will not only benefit our allies abroad, it will also drive significant investment into the domestic economy while making sizeable reductions in global greenhouse gas emissions. The shale revolution has fundamentally transformed the American energy landscape; LNG exports now represent an opportunity to allow the rest of the world to benefit.
— Center for Liquefied Natural Gas (CLNG) Executive DirectorCharlie Riedl

Eagle Ford midstream companies are looking to prosper as natural gas exports overtake imports over the next 16 months. The state is in the middle of a massive LNG export terminal buildout along the Gulf Coast.

Read more at BizJournal.com

Devon: Eagle Ford Brings Highest Margins

Devon Energy executives reported a solid first quarter with the highest margins coming from their Eagle Ford assets. The company’s focus has them on track to produce cost saving of more than $1 billion this year.

Related: Devon Energy to Cut 1,000 Jobs

In the midst of tough conditions, Devon’s ‘lasor-focused’ efforts have delivered significant cost reductions and accelerate efficiency gains. First quarter highlights included a net production of 107,000 Boe per day and operating costs of $58 million, an 18% reduction year over year.

In spite of the challenging industry conditions, Devon achieved another high-quality operating performance in the first quarter as we continued to take the appropriate steps to deliver significant cost reductions and accelerate efficiency gains across our portfolio. These successful efforts resulted in production exceeding the midpoint of guidance for all products and operating costs declining by more than 20 percent year over year.
— Dave Hager, president and CEO

Eagle Ford Operations

Devon’s Eagle Ford operations produced the highest per‐unit margin of any its asset, averaging $13 per Boe, with margins approaching 70% of upstream revenue.The company’s DeWitt County ‘s 50,000 acres are very economical and by far one of the best places to be operating. That asset alone generated $78 million in free cash flow during the first quarter.

Other first quarter highlights include:

  • Drilling times improved by >55% compared to the 2014 average
  • A record rate of 26 wells per rig line per year achieved this quarter
  • Assets generated $78 million of free cash flow and remain on pace to deliver >$250 million of free cash flow in 2016
  • Raised full-year production guidance by 3 percent
  • Reduced LOE costs by 21 percent year over year
  • Lowered 2016 operating cost outlook by $50 million
  • Improved balance sheet strength with liquidity increasing to $4.6 billion
The Eagle Ford has taken a larger – projected to take a larger drop from Q1 of 2016 to Q2 of 2016. But, again, as we bring – we’ve taken a completion holiday there as we bring completion units back into the field in the latter part of Q2, we’ll see that production stabilize from Q2 through Q4 in the Eagle Ford. Month to month, it’s going to be pretty cyclical just depending on the pace of new wells that we bring on.

Devon has plans to spend $200 million developing the Eagle Ford this year compared to $1 billion on its Eagle Ford asset.

In February, Devon announced layoffs of 20 percent of its workforce, or 1,000 employees company wide.

Read more at DevonEnergy.com

Eagle Ford Rig Count Inches Up

Eagle Ford Rig Count Goes Up

Eagle Ford Rig Count Goes Up

The Eagle Ford Shale rig count inches up by one this week, ending with 32 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, Chesapeake Energy and Total E&P have agreed to pay $52.5 million to over 13,000 landowners who were cheated out of natural gas royalties.

Read more: Texas Royalty Owners Win $52.5 Million

A total of 407 oil and gas rigs were running across the United States this week, an increase of four over last week. 82 were targeting natural gas (five less than the previous week) and 325 were targeting oil in the U.S. (nine more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 176 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 were steady this week at three across the Eagle Ford, while natural gas prices jumped to $2.41/mmbtu.

The Eagle Ford rigs targeting oil increased to 29 with WTI oil prices dipping to $48.82, a $.45 decrease this week. A total of 30 rigs are drilling horizontal wells, zero are drilling directional wells, and one are vertical rigs.

Karnes County leads development in the region with 8 rigs running 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

Former Oilfield Workers Look to New Careers

Texas Royalty Owners Win $52.5 Million

Lonestar: Eagle Ford Production Up 23%

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.

Read more at bakerhughes.com

Lonestar: Eagle Ford Production Up 23%

Lonestar Releases First Quarter Earnings

Lonestar Releases First Quarter Earnings

Lonestar Resources plans to focus the rest of 2016 on its Eagle Ford assets in Dimmit, LaSalle and Gonzales Counties.

Related: Earthstone Energy Looks to Resume Eagle Ford Activity

In a first quarter earnings report, Lonestar announced an 18% increase in net oil and gas production to 6,553 BOEPD in 1Q16, vs. 5,547 BOEPD in 1Q15 along with a net loss of $11.3 million.

Eagle Ford Operations

Throughout the quarter, Lonsestar focused its technical and capital resources on the Eagle Ford Shale and boasts an increase of 23% for oil and gas volumes compared over the first quarter of 2015.

“Lonestar currently plans to drill and complete a total of 6 to 7 net wells (9 to 10 gross wells) at today’s NYMEX strip prices, with a focus on Dimmit, LaSalle and Gonzales Counties. The Company’s plan is intended to result in no change in the Company’s net debt position at December 31, 2016 and yield annual average production which Lonestar estimates would range from flat to an increase of up to 10% over 2015 results.”

Highlights include:

  • Assets averaged 5,954 BOEPD during the first quarter of 2016, and was comprised of 3,066 barrels of oil per day, 1,391 barrels of NGL’s per day, and 8,987 Mcf of natural gas per day
  • 75% of production was derived from liquid hydrocarbons, 51% of which was derived from crude oil
  • Operating expenses from Eagle Ford Shale assets totaled $4.1 million, a 14% increase over the first quarter of 2015
  • On a unit of production basis, field operating expenses decreased 9% to $7.53 per BOE, year-over-year as production volumes continued to grow.

Read more at LonestarResources.com