UTA: Air Contamination Not Inherent in Fracking

New Study on the Impact of Fracking

New Study on the Impact of Fracking

A new study focusing on the Eagle Ford Shale Play, finds that air contamination around fracking sites is likely not inherent to the oil and gas extraction process.

Related: BLM: New Flaring Regulations Proposed

Since the shale boom exploded in 2008, controversy has surrounded the practice of hydraulic fracturing (fracking), with many concerned about the potential environmental and health dangers. The University of Texas at Arlington published a new study last week that should be encouraging news to anyone involved in the oil and gas industry and those concerned about the dangers of fracking.

The study took samples around fracking sites in the Eagle Ford and found highly variable levels of benzene, toluene, ethyl benzene, and xylene compounds (BTEX), but all within federally mandated acceptable limits for short-term exposure. The study goes on to suggest that these compounds are not inherent in the extraction process, but can be attributed to mechanical inefficiencies.

These variable contamination events, attributable in many cases to specific natural gas flaring units, condensation tanks, compressor units and hydrogen sulfide scavengers, indicate that mechanical inefficiencies, and not the inherent nature of the extraction process as a whole, result in the release of these compounds into the environment.
— Kevin Schug, UTA Shimadzu Distinguished Professor of Analytical Chemistry and director of the University’s Collaborative Laboratories for Environmental Analysis and Remediation, or CLEAR lab.

If this research proves reliable than it is good news because it means that providing safe fracking methods is within our control. It might also lead to shifting the debate away from crushing the practice all together to working to provide the safest procedures that benefit us all.

We hope that this research would help producers and other upstream operators improve the efficiency and reduce the environmental impact of unconventional drilling.
— Schug

Lucas Energy Joins Lonestar for Eagle Ford Development

Lucas and Lonestar Strike Eagle Ford Deal

Lucas and Lonestar Strike Eagle Ford Deal

Lucas Energy and Lonestar Resources strike a deal to develop joint assets in the Eagle Ford Shale Play.

Related: Lonestar Resources: Focused on Eagle Ford Shale

Lucas Energy announced this week that its wholly-owned subsidiary, CATI Operating, LLC will borrow $1 million to fund drilling, completion and maintenance projects in the Eagle Ford Shale. The company will enter into a joint operating agreement with Lonestar Resources that will cover over 1,450 gross acres. Lucas will have a 8% -14% working interest in the units.

We are pleased to partner with Lonestar, a known and successful operator in the Eagle Ford, by initially participating in the Cyclone #9H and #10H wells in which CATI has a working interest of 8%,” said Anthony C. Schnur, Chief Executive Officer of Lucas Energy. “This represents another step in the growth and expansion of our assets and our company. It is anticipated that the wells will enhance our reserve portfolio and production in addition to securing the leaseholds of the locations.

Details of the deal include:

  • 80% of all cash flow generated will go to satisfy notes with the lender
  • 20% to be used by CATI for lease and other operating expenses and capital expenditures
  • Lucas will have a 8% -14% working interest in the units

Throughout the second quarter, Lonestar 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. The company plans to focus the rest of 2016 on its Eagle Ford assets in Dimmit, LaSalle and Gonzales Counties.

Read more at lucasenergy.com

Eagle Ford Rig Count Loses 3 Gas Rigs

Eagle Ford Operators Put Rigs Back Online

Eagle Ford Operators Put Rigs Back Online

The Eagle Ford Shale rig count fell again this week, ending with40 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, Matador Resources CEO, Joseph Foran, said that the company has done virtually no drilling in the Eagle Ford this year and that the area is not as strategic to the company as it has been in the past. He also revealed that the company is open to opportunities to part with some or all of its Eagle Ford assets.

Read more: Matador Resources Open to Leaving Eagle Ford

A total of 487 oil and gas rigs were running across the United States this week, a decrease from last week of two. The losses were from rigs targeting natural gas, leaving 81 gas rigs running (two less than the previous week) and 406 were targeting oil in the U.S. (10 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 237 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

6 rigs in the region targeted natural gas this week with the commodity trading at $2.87/mmbtu.

The Eagle Ford rigs targeting oil rose to 34 with WTI oil prices dipping $0.88 to $47.64 . 

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

Karnes County moved back into the top spot this week with eight 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

Clayton Williams: No Eagle Ford Drilling at $50

Lonestar Resources: Focused on Eagle Ford Shale

Matador Resources Open to Leaving Eagle Ford

Karnes County Couple Sues Marathon Oil

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

Clayton Williams: No Eagle Ford Drilling at $50

Clayton Williams 2016 Q2

Clayton Williams 2016 Q2

Clayton Williams Energy, Inc (CWEI) won’t be drilling in the Eagle Ford Shale Play until crude prices move considerably higher than $50.

Related: Clayton Williams Stops Eagle Ford Drilling | Eagle Ford Shale Play

In a second quarter earnings call, CWEI executives reported a net loss of $80.9 million while production costs dropped to $19.2 million, versus $23.1 million in 2015.

For their Eagle Ford operations, the company announced they wouldn’t  be drilling in the Eagle Ford as long as prices stay around the $50 mark. For the second quarter, average daily production in the Eagle Ford was 1,661 Bbls for oil compared to 3,238 Bbls in Q2/2015 and average daily production for natural gas was 308 Mcf and 566  for 2015

The past 18 or 19 months which, frankly, feels like about 10 years for me and most of us here. The actions we took early on to cut overhead, to cut operating expenses in the field and eventually to also suspend capital spending pretty much to preserve liquidity we feel like paid off over time. During the year, we drilled a couple of other wells in the Eagle Ford, but most of the year we were pretty much idle when it came to capital spending and we were exploring options for the Company.
— President Mel Riggs

Lonestar Resources: Focused on Eagle Ford Shale

Lonestar Resources 2016 Q2

Lonestar Resources 2016 Q2

Lonestar’s production climbed in the second quarter with Eagle Ford operations leading the way.

Related: Lonestar’s Eagle Ford Production Up 23% 

In spite of a net loss of $12.8 million for the second quarter of 2016, Lonestar Resources registered a 13% increase in net oil and gas production to 6,573 Boe/d, compared to 5,804 Boe/d in the second quarter of 2015.

Other second quarter highlights include:

  • Placed two new Eagle Ford shale wells on stream during May of the quarter
  • Crude oil production rose 17% sequentially in the second quarter as Lonestar’s 2016 completions have all been in the crude oil window.
  • Net loss of $12.8 million for 2Q16 versus a net loss of $8.4 million in 2Q15
  • Adjusted EBITDAX was $16.0 million compared to $22.0 million for 2Q15
The company continues to focus its technical and capital resources on the Eagle Ford shale where it generated a 17% increase in net oil and gas production over to 2Q, 2015 results to 5999 boe per day.
— Doug Banister, CFO

In July Lonestar delisted from the Australian Stock Exchange and  commenced trading on the NASDAQ Global Market under the symbol, “LONE”.  This is a major step as the company moves closer to moving its parent company from Australia to the United States as a Delaware corporation.

Read more here