GreenHunter Energy Plans Commercial Water Facility in Wilson County

GreenHunter Energy has leased acreage and plans to build a commercial water facility in Wilson County, TX. The facility will house at least one disposal well, a frack tank yard, and a treatment plant for produced water, frack water, and drilling muds. Now, if we can just get some rain, so there is water to treat......

GreenHunter Water, has executed a long-term agreement to lease approximately five acres of surface and mineral rights in the Eagle Ford Shale region of South Texas where it will develop a new commercial service facility.

This lease and development project will establish GreenHunter Water's presence in and around Wilson County, Texas. The highly active Eagle Ford Shale drilling in South Texas extends predominantly throughout fourteen counties to the north-east and south-west of the facility's location. The planned use for this location includes one or more salt water disposal wells, a treatment plant for oilfield produced water, frac water and drilling mud and a frac tank lay-down yard. The leased property is strategically located in a high drilling activity region with approximately 90 exploration and production drilling rigs currently active in the immediate area.

This location is the first of multiple planned locations for GreenHunter Water in the Eagle Ford Shale and is a direct response to a request from a number of operators active in the region to provide a "Total Water Management Solution."

 

TexCom's Eagle Ford Environmental Services Adding Disposal Well

TexCom's Eagle Ford Environmental Services, LLC is adding a wastewater disposal well in Atascosa County, TX. All environmental services in the Eagle Ford will continue to expand as drilling activity grows across the play. More disposal wells will be needed to handle the growing volumes of flow-back fluids and produced water. 

TexCom, Inc. (pinksheets:TEXC), today announced that its wholly owned subsidiary, Eagle Ford Environmental Services, LLC has acquired an injection well and permit to operate a liquid disposal site in Atascosa County, Texas. Purchased from Manti Premier Waste Disposal, LP, the site will serve as the foundation to provide Class II non-hazardous oilfield waste disposal services to E&P companies operating in the Eagle Ford Shale, a prolific oil and gas producing region in South Texas.

 

With a completed injection well and the required permit already in place, the proposed new TexCom disposal site is ideally located adjacent to Highway 16, 18 miles south of Jourdanton, Texas and three miles north of McMullen County. The company plans to commence construction of the surface facilities immediately. Lou Ross, Chairman and CEO of TexCom, noted, "This new disposal site will position TexCom right in the heart of the Eagle Ford shale play and we should begin to see impacts from this site in the 4th Quarter of 2011."

Read the full press release at marketwatch.com

Drought Gets Worse as the Eagle For Picks Up

The drought and the renewed call on water resources from the Eagle Ford Shale has been a concern since the beginning of the year when South Texas fell below normal rainfall levels. Water needed for hydraulic fracturing or fracking is now a pull on resources in what is officially the second worst drought on record. Operators are working to limit the impact on South Texas and are beginning to recycle, as well as drill deep water wells. The problem is, in today's world of enormous frack jobs, oil & gas companies use millions of gallons of water to complete each well. Water wells, that are often drilled on the well pad itself, can cost as much as $500,000. That can make completions cost prohibitive in areas with lower economic returns. What was bad a few months ago has only gotten worse, but you can bet the industry is already tackling how to best handle the drought. This isn't the first place water has been an issue. The town of Big Spring is already treating recycled wastewater and you can bet more local towns in South Texas will begin doing the same.

In the midst of the second-worst drought in Texas history, towns across the state are going to extreme measures to cope, capping residential water use, and limiting the number of days households can water their lawns. Earlier this week, the West Texas town of Kemp ran out of water. In Big Spring, the local water district is building a plant to recycle treated wastewater back into the drinking supply.

 

Pioneer Natural Resources Using White Sand in Completions

Pioneer's Eagle Ford Shale completion costs are lowered by as much $700,000 when the company uses white sand instead of ceramic proppant. That's an almost 10% savings on wells that costs $7-8 million. The company is testing white sand on 30% of its wells in 2011 and 2012. It will take some time to truly determine is white sand can hold up under the pressure of the Eagle Ford Shale. Pioneer also lowered its drilled but uncompleted well inventory during the second quarter. The company went from 23 wells to just 11 as central gas processing facilities were brought online.

Okay, turning to Eagle Ford Shale, that's Slide 14. The Eagle Ford shale assets are hitting their stride. As planned, we're running 12 rigs. The average lateral length of the wells is now up to about 5,500 feet. The economics are quite outstanding as we've always discussed, owing to the rich condensate and generally liquid-rich nature of these wells. We're seeing very good performance in Dewitt County, offsetting Black Hawk. One thing we're doing, as we discussed in the last call, is to push the envelope with regard to the use of white sand as a proppant. We have already stimulated 10 wells, and the performance of the wells looked very good and very similar to the direct offset wells where we used ceramics for the proppant. So the idea this year is about 30% of our wells this year, we'll be using white sand, and that's the number also planned for next year, 2012, about 30% of the wells.

And importantly, that reduces the cost of the wells, something like $700,000 per well, which is very significant, if you look at the future drilling campaign. Infrastructure build-out continues. We now have 6 of our central gas processing facilities completed. A seventh will be completed by the end of this quarter and eight in the next quarter. So we are really ahead of the game when it comes to build-out of infrastructure.

And the result as you see on Slide 15 is the ability to put more wells on production. We've met our goal in the second quarter of putting wells on production in the Eagle Ford. We put 18 wells on production. That's reflecting the frac bank being significantly reduced as well. The frac banks starting the second quarter was 22 or 23 wells, now it is 11 at the end of the second quarter, which is basically our minimum run rate, which is one -- basically one well per rig. But you can see, as we bring the 2 new CGPs online this quarter, we have a substantial ability to add a lot more wells to production. And in addition to that, we'll see a similar ability to do that as we get into the fourth quarter. So this area is going to be ramping up dramatically as shown on Slide 16, with the crude oil production well count increasing, third quarter should see a significant increase as shown on the slide, up to 14,000 to 17,000 BOE per day.

You can see we're going to 14 rigs next year. Those 14 rigs are all under contract. And then 16 rigs and 19 rigs looking forward.

Read the full press release at SeekingAlpha.com

Tropical Storm Don Threatens the South Texas Eagle Ford Shale

Will Tropical Storm Don impact the South Texas Eagle Ford Shale? Our estimate is no, but hurricanes have been known to bring winds and flooding that forces operators to shut in production for days at a time in South Texas. It's still early in the hurricane season, so don't rule out the possibility of another storm later in the year. If a hurricane Ike or Katrina hits land, you can bet operators will begin shutting in wells to protect from the increased risk of operations.