Abraxas Sells Assets to Focus on Shale

September 21, 2016 Elizabeth Alford

Abraxas is shifting assets to focus on the Eagle Ford and other shale plays.

Abraxas Petroleum Corporation announced this week that they are selling 14,000 acres in order to focus on major shale plays in Texas and North Dakota.

An SEC filing confirmed the $13 million dollar deal is with Houston-based, Frostwood Energy, LLC. The assets sold produced approximately 145 boepd (127 barrels of oil per day, 112 mcf of natural gas per day) on average during the month of June, 2016

“What we’re doing now is focusing more now on unconventional oil and gas in South Texas, the Bakken (North Dakota), and the Permian Basin.”

— Chief Financial Officer Geoffrey King

Abraxas has also signed a contract to sell the another 12,178 acre surface ranch in Pecos County, Texas that includes ½ of the Company’s minerals on the property for gross proceeds of $6.7 million. The company expects this transaction to close in November, 2016.

Abraxas announced in July that they had begun the process to drill their first well that targets the Austin Chalk at Jourdanton in Atascosa County. The company spudded Bulls Eye 101H on June 16 and estimates that the well will be producing by September 2016. Executives estimate that the drilling and completion costs for this first well will be around $5.8 million, which Abraxas will shoulder alone after terminating talks for a potential joint venture on this project.

Eagle Ford Shale Play Still Holds Great Value

September 19, 2016 Elizabeth Alford

Much has changed in the oil and gas industry over the past two years, but the Eagle Ford Shale Play still holds great value for investors and operators.

Industry leaders gathered in San Antonio last week for the Hart Energy DUG Eagle Ford conference and exhibition, where conversation and presentations centered around the status of the Eagle Ford Shale outside of the boom.

Activity in the Eagle Ford has slowed to its lowest point since 2010 with the Texas Railroad Commission (RRC) reporting last week that they issued 4,830 original drilling permits throughout the state of Texas from January-August. 642 of those permits are for operations in the Eagle Ford Shale. If the trend continues, the Eagle Ford will have fewer permits issued by the end of the year since before 2010.

Despite the massive shift since the glory days of the play, the Eagle Ford is still a prized space in the industry with many productive years ahead. Researchers from the UT’s Bureau of Economic Geology say that the 400-mile field has seen just a fraction of its ultimate activity and their new study predicts that another 100,000 wells can still be drilled.

“The strategic value of the Eagle Ford stands the test of time, so even in the down cycle the values are still very strong.”

— Mark Sooby, managing director at Bank of America Merrill Lynch

Richard Mason from Hart Energy summarized the key takeaways from the conference, with substantial technical progress topping the list. Eagle Ford operators are reducing costs and cycle time and improving recoveries. Operators are drilling longer laterals more quickly or doing the work of six rigs previously, only at lower costs. He also highlighted the huge potential available in Mexico and encouraged everyone to think of North America as an ‘integrated energy province’.

Eagle Ford Rig Count Unchanged

September 16, 2016 Elizabeth Alford

The Eagle Ford Shale rig count remained flat this week, making it the third week in a row ending with 44 rigs running across our coverage area.

In recent Eagle Ford news, UT’s Bureau of Economic Geology released new and unpublished research this week that shows Eagle Ford companies could potentially recover 10 billion barrels of oil at today’s prices.

A total of 505 oil and gas rigs were running across the United States this week, a decrease of 1 from last week of two. 89 rigs targeted natural gas (three less than the previous week) and 416 were targeting oil in the U.S. (two more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 244 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

5 rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $2.95/mmbtu.

The Eagle Ford rigs targeting oil were at 39 with WTI oil prices dipping $2.85 to $43.03 .

A total of 38 rigs are drilling horizontal wells, one is drilling directional wells and five are vertical.

Karnes County continues to lead development this week with nine rigs in operation. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Eagle Ford Drilling & Completion Report

100 New Jobs for Texas Oil & Gas

Eagle Ford Operator Emerges from Bankruptcy

Billions of Barrels Still Available 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.

Eagle Ford Operator Emerges from Bankruptcy

September 14, 2016 Elizabeth Alford

**Penn Virginia Emerges from Bakruptcy**

Penn Virginia Corporation, who focuses on the Eagle Ford Shale Play, has emerged from bankruptcy

Penn Virginia Corporation announced this week that it has satisfied the conditions of the bankruptcy court and reduced total long-term debt by approximately $1.1 billion.

“Today begins a new chapter in the history of Penn Virginia. We have emerged from bankruptcy with a significantly de-leveraged balance sheet and committed financial support from our senior lenders and other stakeholders. With improved liquidity and a stronger capital structure, we are well-positioned to realize the full value of our excellent asset portfolio.”

— Newly appointed chairman, Harry Quarls

The company plans to maintain their core position in the Eagle Ford and for the remainder of 2016, expects to utilize one operated drilling rig in the region. As of November of last year, Penn Virginia reported its position as approximately 100,000 net acres in the oil window of the Eagle Ford shale play in Gonzales and Lavaca Counties, Texas. According to the company website, Eagle Ford production was 14,188 BOEPD during the three months ended March 31, 2016, with oil comprising 10,504 BOPD, or 74 percent, and NGLs and natural gas comprising approximately 14 percent and 12 percent.

Texas has been hit specifically hard with industry bankruptcies. According to the law firm of Haynes and Boone, more that half (25) of the 2016 filing being initiated in Texas courts. The combined total Texas bankruptcy filings for 2015-16 is 43, representing approximately $29 billion in cumulative debt.

Billions of Barrels Still Available in the Eagle Ford

September 13, 2016 Elizabeth Alford

**Eagle Ford Holds Billions of Barrels of Oil**

New research from the University of Texas reveals there are still billions of barrels waiting to be drilled in the Eagle Ford.

On the heels of the Eagle Ford’s lowest drilling activity since 2012, researchers from the UT’s Bureau of Economic Geology released new and unpublished research this week that shows companies could potentially recover 10 billion barrels of oil at today’s prices.

The university has conducted a broad study of shale gas production and reserves in the Eagle Ford Shale Play and the Bakken formation in North Dakota that analyzes energy prices, the cost of drilling and completing a well and the impact of regulations. The full results will be published in various peer-reviewed papers over the next six months.

Scientists were on hand at the recent DUG Conference in San Antonio to share some of their findings related to the potential of the Eagle Ford.

“Scott Tinker, bureau director, and economist Svetlana Ikonnikova, shared that the 400-mile South Texas field has seen just a fraction of its ultimate activity. UT expects 100,000 wells in the Eagle Ford, far more than the 17,000 wells have been drilled so far, according to the Railroad Commission of Texas.”

Other study highlights for the Eagle Ford:

The play holds an estimated 230 billion barrels of oil (only 10 billion can be recovered now)
The play has an estimated 462 trillion cubic feet of natural gas, with 34 trillion cubic feet recoverable.
At least 80,000 more wells will be drilled

Currently, activity in the Eagle Ford has slowed. The Texas Railroad Commission (RRC) reported this week that from January-August, they issued 4,830 original drilling permits throughout the state of Texas. 642 of those permits are for operations in the Eagle Ford Shale. Eight months into the year and the numbers don’t look good. If the trend continues, the Eagle Ford will have fewer permits issued by the end of the year since before 2010.