Houston, 15 May (Argus) — US shale crude output is expected to rise by 122,000 b/d to 5.4mn b/d next month, according to new data from the US Energy Information Administration (EIA).The largest increases will be in the Permian basin in Texas and New Mexico, and the Eagle Ford in south Texas, the EIA said in its latest Drilling Productivity Report.Permian basin production should increase by 71,000 b/d from May to June to about 2.49mn b/d.Output in the top-producing Permian has been more resilient than in other regions during the downturn in commodity prices because of lower extraction costs. Midstream companies are investing heavily to add takeaway capacity out of the region because of the expected rise in output.Eagle Ford oil production is expected to rise by 36,000 b/d to about 1.28mn b/d in June.
Source: News – Argus Media
EOG posted a profit for the first quarter of the year, accomplishing a relatively rare feat in the shale patch. Given its reputation as a top operator it was expected.
Its Eagle ford acreage, which helped earn its reputation, is now showing signs of deterioration in terms of quality as the Eastern part is saturated, while Western part is inferior.
EOG is working to move away from over-dependence on Eagle Ford, increasing presence in currently popular areas like the Delaware basin. It remains to be seen whether it will help.
This was not unexpected, given that other companies involved in shale announced an operating profit for the first quarter of the year. One such company that I just covered was Chesapeake (NYSE:CHK), which is generally not thought of as one of the best in the shale patch. The fact that EOG (NYSE:EOG), which developed a reputation in the shale patch as one of the best, announced a profit did not surprise me. If there is anything to be surprised of here is the fact that the operating profit was only $108 million on revenue of $2.6 billion. Chesapeake by comparison had an operating profit that was double, on similar revenue, as I pointed out in a recent article.
Source: EOG’s Eagle Ford Golden Era May Be Close To Ending – EOG Resources, Inc. (NYSE:EOG) | Seeking Alpha
WildHorse Resource Development is acquiring Eagle Ford properties for US$625 million. The assets, comprising 111,000 net acres (449 square km), are being purchased from Anadarko Petroleum and affiliates of private equity firm Kohlberg Kravis Roberts & Co.In 2016, fourth-quarter net production on the acquired properties totalled 7,583 boepd, comprising 72% oil from 386 operated wells. The assets are located in Texas’ Burleson, Brazos, Lee, Milam, Robertson and Washington counties, adjacent to WildHorse’s existing acreage position. The transaction is expected to close on or around June 30, 2017 with an effective date of January 1, 2017.The Houston-based firm said that production on the purchased acreage came from 68 Eagle Ford, 299 Austin Chalk, and 19 Buda-Georgetown operated wells. The acreage is estimated to contain 949 net Eagle Ford locations and 22.9 million boe of proven developed producing reserves, consisting of 73% oil and 88% liquids.“This transformative acquisition presented us with a strategic opportunity to consolidate our acreage position. With a total of 385,000 net acres [1,558 square km], we have built a premier contiguous acreage base, making us the second largest operator in the entire Eagle Ford trend,” said WildHorse’s chairman and CEO, Jay Graham.
Source: Your Oil & Gas News | WildHorse buys Eagle Ford assets for US$625 million
Two new crude pipeline projects from West Texas’ prolific Permian Basin to the Corpus Christi coastline have analysts crowing about refinery and export expansion in that city. The Houston-based pipeline company Buckeye Partners has proposed a 400,000 barrel-per-day line from Wink and Midland to existing facilities in Corpus.And a three-company consortium — TexStar Midstream Logistics, based in San Antonio, Castleton Commodities International, out of Connecticut, and Dallas-based Ironwood Midstream Energy — have proposed a new 590,000 barrel-per-day pipeline from Orla, Pecos, Crane, and Midland to Corpus, with a stop in Gardendale in the Eagle Ford oil field. Both projects aim to open for business in 2019.
Source: Pipelines planned from Permian to Gulf; Boom to come to Corpus Christi | Fuel Fix
From the moment it began, you could tell something was missing from Exxon Mobil Corp.’s first strategy presentation under its new CEO: Texan Rex Tillerson’s usual jab at New York City, where the event is held.His successor at the helm, Darren Woods, kept many other things the same. There was the usual emphasis on superior performance and the benefits of integration and a relatively humdrum Q&A session.For all the continuity, though, Woods signaled some big shifts in where this supertanker is going.First, although capital expenditure is set to increase this year, Exxon appears to have partly embraced the idea that big budget projections are taboo with investors these days, aiming to hold spending at around $25 billion a year through 2020. That’s up from 2016’s $19.3 billion — which was very low — but still notably below the $30 billion-plus levels of 2011 to 2014, which eroded Exxon’s return on capital and dimmed its reputation for discipline.
Source: Exxon Will Remake Shale Or Shale Will Remake Exxon – Bloomberg Gadfly
The Sierra Club filed a motion to oppose a $1.5 billion pipeline by Houston-based Spectra Energy Corp. (NYSE: SE) to deliver natural gas from the Eagle Ford Shale to customers in Mexico.Just a few hours ahead of a Dec. 23 deadline for public comment, Sierra Club attorney Nathan Matthews filed a motion to intervene with the Federal Energy Regulatory Commission to oppose the Valley Crossing Pipeline.
Source: Sierra Club files motion to intervene in Valley Crossing Pipeline’s FERC application – Houston Business Journal
A Houston company is looking to pump $500 million into South Texas to create the largest new refinery in the U.S. in nearly 40 years.The facility — located in the southwest corner of Duval County off of Texas Highway 359 — will be able to process up to 50,000 barrels of Eagle Ford shale light crude oil a day, and will have up to 4 million barrels of available storage, the company said in a news release.
Source: South Texas to get America’s largest new refinery since ‘77 – San Antonio Express-News
An ambitious $20 billion project to build a 137-mile pipeline and a liquefied natural gas export terminal in deep South Texas has taken the next step forward.NextDecade LLC has filed its official application with the Federal Energy Regulatory Commission on Thursday. The Woodlands-based company is seeking to build the Rio Bravo Pipeline and the Rio Grande LNG export terminal in the Port of Brownsville.
Source: NextDecade files official application to build Rio Grande LNG in the Port of Brownsville – San Antonio Business Journal
Completes First Economic Enhanced Oil Recovery Test in U.S. Horizontal Shale Reservoir
Concludes Four Pilot Projects in the Eagle Ford
Adds New Reserve Potential at Single Digit Per Barrel Costs
Generates High Net Present Value
Delivers Rates of Return on Investment Exceeding 30 Percent at $40 Oil Price
Extends EOG’s Horizontal Technology Gains
Announces Successful South Texas Austin Chalk Exploratory ResultsReports
Strong Quarterly Operating Results, Exceeds U.S. Oil Production and Cost Reduction Targets
Source: EOG Resources Announces First Quarter 2016 Results and Successful Enhanced Oil Recovery Project – KFDA – NewsChannel 10 / Amarillo News, Weather, Sports
Explorers in U.S. oil fields stung by the quick rise and fall in the market last year are expected to move cautiously when crude prices begin to climb again. Bill Thomas, chief executive at EOG Resources Inc., the largest landholder in Texas’s Eagle Ford shale formation, told attendees at an industry conference in Houston on Wednesday that his company won’t start boosting output the first time oil hits $60 a barrel. “We’re going to make sure the market is in good shape, it’s balanced, and we’ve got a future,” Thomas said. “We don’t want to ramp it up and drive the price of oil down again.”
Source: It’ll Take More Than an Oil Rally to Restart Shale Boom – Bloomberg Business