Cabot to Reduce Spending in the Eagle Ford

August 15, 2016 Elizabeth Alford

Cabot Oil and Gas announced second quarter results, highlighting a 10% production increase, costs reductions of 12% and three Eagle Ford wells added to production.

During a recent earnings call, Cabot executives commented on their Eagle Ford operations, saying it is likely they will cut back on the money spent in the region for the rest of 2016. Though the company’s Eagle Ford assets assets exceed the capitol costs, the return doesn’t warrant additional spending at this time.

Cabot’s Eagle Ford Shale assets achieved net production of 14,312 barrels of oil equivalent (Boe) per day during the second quarter, an increase of 10% over the first quarter of 2016. The Company completed and placed on production three net wells during the quarter and plans to drill two Eagle Ford wells during the third quarter.

“Despite a significant reduction in our Eagle Ford operating activity, including no wells drilled and only three wells completed during the quarter, our oil volumes for the second quarter exceeded our guidance due to outperformance from the newer wells that were placed on production. We are forecasting declines in our oil production volumes for the remainder of the year (…) and our plan is to continue to allocate a minimum amount of capital to our Eagle Ford assets”

— Dan O. Dinges – Chairman, President & Chief Executive Officer

Second quarter highlights include:

Cash flow from operating activities was $85.2 million ($171.2 million for 2015)
Net loss was $62.9 million ($27.5 million for 2015)
Operating expenses decreased to $2.22 per thousand cubic feet equivalent (Mcfe), a 12% improvement

Eagle Ford Gains One Rig this Week

August 13, 2016 Elizabeth Alford

The Eagle Ford Shale rig count gained one, ending the week ending with 44 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, a group of citizens from one Nordheim is suing the Texas Railroad Commission over plans for a waste site in their community.

A total of 479 oil and gas rigs were running across the United States this week, and increase from last week of17. 83 were targeting natural gas (two more than the previous week) and 396 were targeting oil in the U.S. (15 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 230 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

10 rigs in the region targeted natural gas this week with the commodity trading at $2.60/mmbtu.

The Eagle Ford rigs targeting oil dropped to 34 with WTI oil prices inching to $44.49, a $2.83 increase this week.

A total of 37 rigs are drilling horizontal wells, one is drilling directional wells and six are vertical.

Karnes County leads development in the region with eight rigs running this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

agle Ford Shale News

Texas Oilfield Relief Initiative Takes Shape

EOG Boasts 2,000 Eagle Ford Locations

Nordheim Citizens Sue Texas Railroad Commission

Chesapeake to Run 3 Rigs 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.

Texas Oilfield Relief Initiative Takes Shape

August 11, 2016 Elizabeth Alford

The Texas Railroad Commission is getting a facelift designed to benefit public and industry interests.

Railroad Commissioner Christi Craddick gave more details this week on the Texas Oilfield Relief Initiative, a new project designed to make the state’s energy regulatory body more efficient and effective. Craddick says that the initiative will still ensure public and environmental protections while also reducing the regulatory administrative burden on industry.

“With the current industry downturn, at stake is the survival of the state’s small producers and the oil industry’s many marginal wells, which make up 85 percent of total U.S. oil wells and 18 percent of the nation’s total oil output,” said Judy Stark, Panhandle Producers and Royalty Owners Association Executive Vice President. “During this critical time, Commissioner Craddick’s initiative will provide relief to Texas’ independent producers, the backbone of both our state and nation’s oil industry. For that, PPROA’s members are truly grateful.”

Industry officials and interest groups have been quick to praise the initiative, including representatives of the Texas Independent Producers and Royalty Owners Association, Panhandle Producers and Royalty Owners Association, Texas Alliance of Energy Producers, Permian Basin Petroleum Association and the Texas Oil and Gas Association.

Details of the Texas Oilfield Relief Initiative that will reduce adminstrative burdens include:

Identify agency reports and filings that can be reduced or eliminated

Amend rules to modify gas well deliverability reporting requirements

Reduce the need for G-10 filings except for surface commingled production

Allow a calculated well shut-in pressure to be provided when filing Form G-10 for gas wells

Amend production requirements for marginal and stripper wells

Revise “Active Oil Well” definition from ten barrels of oil (BO) per month for 3 consecutive months to five BO per month for 3 consecutive months or any reported production in each month for a consecutive 12 month period (SWR 15)

Revise “Active Gas Well” definition from 100 mcfg per month to 50 mcfg per month or any reported production in each month for a consecutive 12 month period (SWR 15)

Implement a revised internal inspection priority system

Reviewing washout factors to determine whether different washout factors should be used in certain areas of the state to calculate cement tops

Identify counties or portions of counties in which the usable quality water protection depth is constant.

Issue guidance for implementation of the Texas Environmental, Health & Safety Audit Privilege Act, permitting operators of new property to identify and remedy violations resulting previous to their ownership

Conduct an extensive review of all Railroad Commission forms required determine whether data collected is currently used or no longer necessary. Eliminate forms no longer useful to the Commission’s regulatory functions to reduce regulatory administrative burden on staff and industry.

Simplify the complete duplication of a drilling permit application with a sworn statement of no changes to the original application

EOG Boasts 2,000 Eagle Ford Locations

August 10, 2016 Elizabeth Alford

EOG resources announce they have increased their Eagle Ford investments to almost 2,000 locations.

For the second quarter of 2016, EOG Resources reported a net loss of $292.6 million while increasing their premium drilling locations from 3,200 to 4,300. They were also able to decrease cash operating costs per unit by 15% compared to full-year 2015.

Eagle Ford Operations

During a conference call last week, EOG executives highlighted their Eagle Ford assets, saying these continue to lead the company in activity and production.

“Year after year, we improve our well productivity in the Eagle Ford. Much of this year’s increase can be attributed to our shift to premium drilling. However, just 60% of our 2016 drilling program is premium, so we expect to see improvement for many years to come.”

— Lloyd W. Helms, Jr. – Executive Vice President, Exploration & Production

Eagle Ford Highlights for 2016 Second Quarter

Increased premium inventory by 390 net drilling locations to almost 2,000 total
Completed 60 wells with an average treated lateral length of 4,800 feet per well
Averaged 30-day initial production rate per well of 1,705 barrels of oil equivalent per day (Boed)
Droped total well cost another 11% year to date to $5.1 million

Nordheim Citizens Sue Texas Railroad Commission

August 9, 2016 Elizabeth Alford

A group of citizens from one Eagle Ford town is suing the Texas Railroad Commission over plans for a waste site in their community.

Folks in Nordheim, TX, population 316, have been waging war for several years against Pyote Reclamation Systems over a proposed waste site that borders their small Dewitt County town.

Residents have sent over 200 protest letters, showed up at RRC meetings and started a non-profit form Concerned About Pollution.

When the Texas Railroad Commission permitted the waste project in May, the group filed a lawsuit against the state’s regulatory agency.

The 143-acre waste pit would store drill cuttings, oil-based muds, fracking sand and other toxic oilfield leftovers. Citizens are concerned over potential safety issues such as increased truck traffic, the proximity to schools and the inability of the fire department to respond to a fire.

Even RRC Commissioner Ryan Sitton wasn’t keen on the waste site but said he had no other choice but to approve it.

“Does your client understand the social license to operate they have asked for here? I’ll be candid. I don’t like the site.””

— Commissioner Ryan Sitton to Pyote’s attorney