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Showing posts with label Texas. Show all posts
Showing posts with label Texas. Show all posts

Friday, September 9, 2011

East Texas, Haynesville Production Stable Despite Wildfires

- East Texas, Haynesville Production Stable Despite Wildfires

Friday, September 09, 2011
Rigzone Staff
by Karen Boman

The wildfires plaguing East Texas have not impacted natural gas production volumes in the region, including Haynesville shale play production, but evacuations and fire-related damage have negatively impacted demand, BENTEK Energy reports.

Over the last three days, evacuations and fire-related damage in Texas have led to a near 1.0 Bcf total demand loss. BENTEK expects demand recovery to be gradual, though some demand should return due to rising temperatures. The Texas gas demand forecast, based on temperatures, shows power burn increasing by nearly 1.0 Bcf in the coming week, BENTEK said.

The Haynesville shale, one of the largest gas shale plays in the U.S., straddles the Texas and Louisiana border. Haynesville shale production from both states totals just above 5.0 Bcf/d, with about half of that production coming from the Texas side, BENTEK reports.

“BENTEK’s sample of production receipts from East Texas and Haynesville has not yet shown a distinct decline in production receipts that could be directly attributable to the fires,” BENTEK said in a report today. However, some of the fires have erupted around the perimeter of Haynesville shale counties, raising concerns about safety and disruptions in the fields.

Wildfires have burned acres in Harrison County, Texas, a core Haynesville production area in the state, and four non-core Haynesville production counties in Texas, Gregg, Marion, Nacogdoches and Rusk.

“If fires were to erupt in more developed areas of the shale, operations would undoubtedly have to be shut in, restricting production,” BENTEK said. “Even without a fire, downed power lines or disruptions in power transmission could also impact operations of pump jacks and compressor stations.”

To date, 26 large fires have burned nearly 114,000 acres in Texas, and are threatening oil and gas operations in the East Texas region as well as Louisiana and Oklahoma. An estimated 1,700 homes were either evacuated or lost, and more are threatened by fires.

“Much of East Texas is experiencing the highest level of drought conditions, and the fire danger in the East Texas Basin remains high to very high,” BENTEK said. Tropical Storm Nate will likely spare Texas from high winds but also withhold chances for rain.

Louisiana’s Department of Natural Resources (DNR) on Sept. 6 issued an advisory calling on oil and gas operators to monitor conditions closely and take necessary steps in case of fire, including shutting in wells, production facilities and pipelines if necessary.

“As drought conditions persist in many areas of our state, so does the risk of wildfire and the potential for wildfires to grow quickly out of control once they start,” said DNR’s Commissioner of Conservation Jim Welsh. He reminded operators that state regulations require combustible vegetation, trash and debris should always be kept at least 100 feet away from wellheads, production equipment, storage tanks and other exploration and production site structures.

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Friday, September 2, 2011

Halliburton Filed Claims Against BP In Texas State Court

- Halliburton Filed Claims Against BP In Texas State Court



Sep 2, 2011

Halliburton (NYSE:HAL) filed claims against BP (NYSE:BP) in Texas state court for negligent misrepresentation, business disparagement and defamation related to the April 20, 2010, Macondo incident.

The company also moved to amend its claims against BP in the multi-district litigation in New Orleans, Louisiana, to include fraud.

Halliburton has a potential upside of 66.9% based on a current price of $43.02 and an average consensus analyst price target of $71.79.

Full news
- Halliburton Sues BP In Texas - Alleges Misrepresentation <<


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Tuesday, August 30, 2011

Texas Suit Focuses on Drilling Site Attendant Status

- Texas Suit Focuses on Drilling Site Attendant Status

Tuesday, August 30, 2011
Houston Chronicle
by L.M. Sixel

Some are winter Texans looking for extra cash to supplement their retirement. For others, it's a job like any other.

Either way, the Department of Labor believes the Gate Guard Services attendants who live in their recreational vehicles while logging traffic at oil and gas drilling sites were improperly classified as independent contractors.

Last year the government told Gate Guard that it owes its 345 attendants $6.2 million in minimum wage and overtime for the 24-hour/seven-day-a-week job. The back wage tally also includes overtime pay for service technicians who empty the septic tanks and provide fuel for the attendants' RVs. Some worked as many as 96 hours a week, according to the Labor Department.

But Gate Guard and its Houston-based owner, Bert Steindorf, reject the government's position.

Anticipating a Labor Department lawsuit, Gate Guard sought legal action through a declaratory judgment in a Victoria federal court, hoping to gain the upper hand on procedural issues such as choosing where the case will be heard.

The government filed its lawsuit in February, three months after Gate Guard filed its case.

Corpus Christi-based Gate Guard provides gate attendants at drilling sites all around Texas, including several locations near Houston and San Antonio.

"Companies believe they have to accept what the government tells them," said Annette Idalski, an employment lawyer with Chamberlain Hrdlicka in Atlanta who is representing Gate Guard. "They don't. They can fight back."

Other experts question that aggressive stance, noting that Gate Guard's preemptive declaratory judgmentlawsuit won't keep the government's wage and hour case from going forward.

Nor will it provide much in the way of procedural advantages, predicted Houston employment lawyer Rex Burch of Bruckner Burch, who is not involved in the case.

The company's strategy was the brainchild of Daniel D. Pipitone, a maritime and commercial litigation lawyer at Chamberlain Hrdlicka in Houston. He figured he could borrow some of the same aggressive litigation techniques he uses when he's wrestling with a commercial case.

"Why can't we be proactive here?" said Pipitone, recounting a conversation he had with Idalski, his colleague in Atlanta. Idalski said she explained that companies typically wait for the Labor Department to take legal action and then respond.

Pipitone said being first to file gives a party the advantage of being the plaintiff, the side that gets the first and last word in jury arguments.

But Burch said that, from his reading of the ruling last month by senior U.S. District Judge John D. Rainey, he expects the court will end up hearing the case in traditional fashion with Gate Guard as the defendant.

Rainey's order combined the two cases into one and moved it to Victoria. That was Gate Guard's choice because many of its gate attendants live there. The Labor Department's preference was federal court in Corpus Christi.

Ed Sullivan, an employment lawyer who represents management clients with Oberti Sullivan in Houston, agrees that the ruling will have little effect. It's a novel strategy, he said, but one that won't likely change the course of the case.

"At the end of the day, the question will be whether they're independent contractors," said Sullivan, who regularly represents clients in wage and hour disputes. And companies typically lose, he added, citing the Labor Department's high rate of success in cases it brings.

A Labor Department spokeswoman said the agency doesn't comment about ongoing cases.

Legal wrangling aside, Pipitone agrees that the heart of the issue is whether the 345 attendants are independent contractors who are responsible for paying all their own taxes and providing their own benefits, or whether they're employees who are subject to federal wage and hour laws such as minimum wage and overtime.

The attendants are on site 24-hours a day and earn $100 to $175 a day. Nothing prevents them from hiring someone else to watch the gate, said Idalski. And nothing stops them from reading, watching television or even drinking beer while they're in their trailers.

The gates are rigged with a bell to summon the attendants, said Idalski, estimating that they only spend a few hours a day actually working.

They're not supervised, she said, and the workers sign contracts agreeing they are independent contractors.

If Gate Guard doesn't convince a jury that its workers are independent contractors, it will argue that they're not really working when they're in their RVs, said Idalski.

The Labor Department has already agreed to subtract eight hours a day per attendant for sleeping and eating, which reduces the company's back wage bill to $2 million, she said.

Generally speaking, people who work from home can take care of their children, cook dinner and do laundry while they wait for assignments and that personal time isn't considered work time, she said.

Similarly, full-time employees who are on-call are free to do what they wish unless they're called in, according to the Labor Department rules.

They make a distinction between workers who are "waiting to be engaged" and those who are "engaged to wait" -- such as firefighters who play checkers while waiting for alarms or factory workers who chat with their co-workers while machinery is repaired.

(c)2011 the Houston Chronicle. Distributed by MCT Information Services.

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EGPI Negotiating for East Texas, La. Properties

- EGPI Negotiating for East Texas, La. Properties

Tuesday, August 30, 2011
EGPI Firecreek Inc.

EGPI Firecreek, Inc. (EGPI) is in the final stages of negotiations for a binding agreement to acquire multiple leases for oil and gas production currently servicing East Texas and Louisiana through the current leaseholder (The company).

The company has been in business for over 15 years as an oil and gas production company with approximately 10 to 12 producing wells at depths of 2,200 to 2,400 feet. They currently employ approximately 18 people and own all servicing equipment to maintain its well operations.

Negotiations for the acquisition have been ongoing and are estimated to include acquiring 100% working interests and 80% of the corresponding net revenues of the properties which encompass approximately 2000 acres in East Texas and Louisiana.

EGPI’s Board of Directors have given permission to move into the final stages of negotiations in order to execute a formal binding agreement.

Dennis Alexander, EGPI's CEO, stated, "We believe this target acquisition meets our criteria in assisting EGPI’s continued growth plans for the integration of assets and revenue stream for our Oil & Gas division. We are working diligently in order to finalize this agreement within a reasonably short period of time.”

About EGPI Firecreek, Inc.

EGPI Firecreek, Inc.'s business and acquisition strategy is focused on oil and gas production with an emphasis on acquiring existing fields with proven reserves, the rehabilitation of potentially high throughput oilfields, resource properties and inventories, through its wholly owned subsidiary Energy Producers, Inc. (Energy Producers) and for oil and gas servicing business through its wholly owned subsidiary Chanwest Resources, LLC. EGPI Firecreek, Inc. is also looking to expand into alternative energy sources as well as industries in the energy field.

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Friday, August 26, 2011

Land Camp to Serve Influx of Eagle Ford Workers in South Texas

- Land Camp to Serve Influx of Eagle Ford Workers in South Texas

Friday, August 26, 2011
Rigzone Staff
by Karen Boman

The exploration and drilling boom in South Texas' Eagle Ford shale play has drawn hundreds of workers to the region, crowding the existing hotels and housing beyond capacity. To meet housing needs, oil service companies that including Halliburton, Weatherford and Schlumberger invited Houston-based Remote Logistics International to set up the Three Rivers Lodge, a lodging camp for oil service workers in Three Rivers, Texas, approximately 70 miles south of San Antonio.


The facility, which held its grand opening on Aug. 6, is part of Remote Logistics' offerings of support services for both the offshore oil and gas industry as well as land camp harsh remote environments. For oil service companies, offering the housing is about safety. Workers driving great distances to and from work sites, and then looking for food on the way back to their lodgings, are more exhausted and at greater risks on the road, said Hud Gibbins, who works in business development at the company and helps directly oversee the lodge.

Founded by Jenny Savage, who comes from a background in hotel and restaurant management, Remote Logistics caters to what it considers niche markets like South Texas with facilities providing housing, laundry, meals and entertainment under one roof. Remote Logistics has handled catering and housekeeping duties for onshore and offshore rigs and facilities in the Gulf of Mexico and the Middle East for five years; the company also offers remote medical services for oil and gas operations. Remote Logistic's roster of clients includes Rowan and Cal Dive International.


Though the buildings are temporary, the landscaping and facilities feel more like a ski lodge, said Gibbins. The facility offers three meals a day, prepared by a culinary staff of four-star rated chefs from across the globe. The menu includes heart healthy offerings such as a salad bar and grilled chicken to southern fried chicken, biscuits and all the pies, cakes and cookies you can eat. Workers are sent out each day with a box lunch containing sandwiches, fruit and two bottles of water.

"The lodge caters to workers ranging from the mid-20s to 40s and 50s who are away from their homes and families for 21 days at a time," said Gibbins. "Offering food, entertainment and lodging under one roof, including a movie room, wireless internet and DVD players makes them feel more at home."

The facility offers 192 beds and 48 rooms. The lodge is made up of trailers 28 feet wide by 60 feet long, but the kitchen and rec room are each doubled up to make one 56 foot by 60 foot trailer. There are two dedicated to the kitchen and dining room, two for the reception, rec room, movie room and business center/conference room, six for crew quarters and bathroom/shower, and one for the camp boss and medic's office. A company spokesperson said the lodge is already almost entirely booked and additional buildings will need to be ordered to keep up vacancy given the enormous demand.

While Three Rivers was built with oil service workers in mind, the occasional traveler in the area would be welcome and receive the same treatment. In fact, some rooms are being set aside to accommodate hunters for the upcoming deer season. Three Rivers Lodge also will serve as a flagship facility for Remote Logistics training, said Gibbins, with all workers hired by the company will undergo training at the lodge before heading to assignments overseas.

Demand for worker housing is so great in South Texas, Remote Logistics has plans to open another lodging camp by year-end near Ashterton in Dimmit County or Cuero in DeWitt County to accommodate workers. Remote Logistics is conducting demographic work to determine the site for the new camp. The company also will begin offering its catering and housekeeping services to land camps geared towards the Bakken oil play, where the surge in exploration and production activity has created a similar influx of workers into North Dakota communities that lack the hotels and housing to accommodate all the newcomers.

Positive Outlook for Eagle Ford Development

Eagle Ford exploration and development activity has created positive economic output for South Texas, an area of the state that traditionally has had higher unemployment and lower income per household compared to other portions of the state, said Dr. Dominique Halaby, former director of the University of Texas at San Antonio's Center for Community and Business Research, who worked on a study of the Eagle Ford's economic impact on South Texas that was released earlier this year.

Since the Eagle Ford boom began, unemployment in South Texas has declined, going against the national trend of rising unemployment, and creating wealth for ranchers and farmers who have faced difficult financial times in the past, said Halaby, now a professor at Georgia Southern University, at the North American Prospect Expo in Houston earlier this month.

In 2020, Eagle Ford shale activity is expected to account to about $11.6 billion in gross state product, $21.6 billion in total economic output and support nearly 67,900 full-time jobs in the region.

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Thursday, August 25, 2011

Range Advances Operations in Georgia and Texas

- Range Advances Operations in Georgia and Texas

Thursday, August 25, 2011
Range Resources Ltd.

Range provided the following update across a number of its international interests.
Georgia

Range announced that the hole to 700m has been opened up to 17 1/2" with the 13 3/8" casing successfully cemented to the depth of 700m. The blowout preventer ("BOP") is currently being fitted after which the rig will shortly resume drilling with a target total depth of approximately 3,500m expected to be reached in mid/late September.

The Mukhiani Well is targeting the Vani 3 prospect which has the following estimated undiscovered stock tank oil-in-place ("STOIIP"):

Vani 3 Prospect - STOIIP (MMbbls)

P90 P50 P10 Mean
Gross (100%) 41.7 92.7 178.2 115.2
Net Attributable to Range (40%) 16.7 37.1 71.3 46.1

The recently completed geochemical helium survey undertaken by Range confirmed the suitability of the first drill location with oil exploration and development prospectivity complementing the earlier seismic work completed on the target.

Texas - North Chapman Ranch

Range also announced that the Company remains on track to commence the two well program on the North Chapman Ranch prospect in October 2011, with the Albrecht well to be drilled in the east south east portion of the license area with the second well location currently being finalized. With the Smith #1 and Russell-Bevly wells located in the north-west corner of the license area,
assuming success on the Albrecht well alone, the Company would expect a significant re-classification of the current P2 &amp; P3 (Probable &amp; Possible) reserves into the P1 (Proved) and P2 (Probable) categories.

In addition to the Howell Height formation that the Smith #1 and Russell- Bevly wells are currently producing from, the Albrecht well is
also targeting multiple shallower targets. The shallower objectives are known to produce within or on trend with our license area.

Texas - East Texas Cotton Valley

Operations have resumed on the Company's Ross 3H horizontal well after fluid samples from the well were recently collected and analyzed. The Ross 3H was drilled with significant oil shows and strong evidence of oil saturation from core data but experienced a high pressure salt water flow near the end of its nearly 3,500 ft. lateral section. Range and its partners will continue to perforate and test additional sections of the lateral. If successful, the Ross 3H could set up a multi-well horizontal development program to exploit the
shallow oil reservoir there.

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Thursday, August 4, 2011

EDITORIAL: World's Watching

- EDITORIAL: World's Watching

Thursday, August 04, 2011
Houston Chronicle

The excitement across Texas about possibilities for new natural gas and oil plays is palpable, particularly across South Texas, site of the rich Eagle Ford Shale formation.

Like most Texans, we're supporters of responsible, environmentally sensitive development of these resources that can help bring well-paying jobs to Texas, greatly increased revenues to the state and greater energy and economic security to the country as well.

For those and other reasons we're pleased to see the Texas Railroad Commission take a pro-active position in overseeing safe and responsible development of the area's resources.

Commissioner David Porter has created an Eagle Ford Task Force to head off the kind of public backlash that has troubled the Barnett Shale area in North Texas.

Porter is on target with his diagnosis of what went wrong in North Texas: too little information about the development process, which has been near populated areas, and a perception that the energy companies doing the work were calling the shots while the Railroad Commission was largely AWOL or doing the minimum to direct the process to ensure that public and environmental interests were protected.

To his credit, Porter is trying to avoid a repeat of that situation in South Texas and the public backlash that could hinder development of the region's immense resources. He has assembled a group of 22 stakeholders that includes representatives of drilling, pipeline and trucking companies, green energy experts and environmentalists, county and economic development officials, landowners and those who represent landowners, according a report by Vicki Vaughan of the San Antonio Express-News that ran in last Thursday's Chronicle ("Eagle Ford advisers ready to tackle goals," Page D3, July 28).

The significance of this work was probably best summed up by an Eagle Ford landowner and member of the Sierra Club: "We're on a world stage," said Teresa Carrillo. While noting the "fantastic" economic opportunity presented by the drilling, Carrillo also focused on the challenge to do it right.

Others have emphasized the opportunity that Eagle Ford offers the industry to "do it right and establish best practices" that can be used in other areas going forward.

This attitude is imperative, we would argue, and appears to be gaining traction across the industry, judging by the remarks of visitors from the industry meeting with the Chronicle's editorial board recently.

We detect a consensus that when it comes to caring for the environment, the entire industry must be cleaner than clean -- more rigorous than the regulators.

We hope that mind-set prevails and believe the Railroad Commission is setting the proper tone in its approach toward development in the Eagle Ford Shale area.

Copyright (c) 2011, Houston Chronicle

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Wednesday, July 27, 2011

Texas Oil, Gas Jobs Rebound

- Texas Oil, Gas Jobs Rebound

Wednesday, July 27, 2011
Houston Chronicle
by Tom Fowler

Employment in Texas' oil and gas industry rebounded to its pre-recession highs while oil production solidified its return to the top of the fossil fuel ladder for the first time in more than a decade, according to an index of state energy activity.

The Lone Star State employed 224,200 workers in exploration and production in June, according to the Texas Petro Index -- more than the 223,200 at the height of the last energy boom in October 2008 and nearly 15 percent more than in June 2010, said Karr Ingham, the Midland economist who created and maintains the index.

Oil production also beat out natural gas as the dominant Texas fossil fuel product by value during the first six months of 2011, reversing a trend that started in 1997 when natural gas began to dominate the state's energy production.

"In the past 12 months, the industry has added more than 28,600 jobs, which is nearly 13 percent of all jobs added to the Texas economy," Ingham said.

Oversized impact

The oil and gas industry only accounts for about 2 percent of the state's entire workforce payroll, Ingham says, but it tends to have an oversized impact on the entire state economy because it is so capital-intensive. By some estimates, as much as two-thirds of Texas' job creation in the past year could be tied directly and indirectly to the oil and gas exploration business.

"That's really an accomplishment, considering the TPI in June indicates the industry still has not recovered to the level of economic health that created the last jobs milestone," Ingham said.

Unemployment was 8.2 percent in Texas in June. Nationally, the unemployment rate is 9.2 percent.

The Texas Petro Index is a composite based on economic indicators such as commodity prices, production volumes, employment and drilling data. The index starts with 1995 as the base year, with a score of 100.

The Texas Petro Index grew in June for the 18th consecutive month to 243.5, from a low in December 2009 of 186.6. It has not yet returned to its peak, 286.0, recorded in September and October 2008, and isn't expected to reach that point again for many months, Ingham said.

That's because other elements of the index, such as natural gas prices, the number of drilling rigs active and the number of wells completed, continue to lag behind the historic highs.

Crude prices, however, have risen significantly, helping push the value of Texas-produced oil to nearly $3.16 billion in June, 29.5 percent more than in June 2010.

Natural gas production was worth $2.46 billion in June, up slightly from June 2010, but the value of Texas' natural gas production for the first six months of 2011 was down more than 17 percent from the prior year, to $14.4 billion.

A return to its roots

The current energy industry growth spurt is different than the boom from 2002 to 2008, Ingham said.

Back then the growth largely was due to the expansion of drilling and production in natural gas shales, thanks to industry perfecting a combination of horizontal drilling and hydraulic fracturing.

"In the current expansion, the industry has returned to its crude oil roots," Ingham said, but it's hardly a repeat of the oil booms in the early 1980s and 1990s.

"In the current expansion, the industry has returned to its crude oil roots," Ingham said, but it's hardly a repeat of the oil booms in the early 1980s and 1990s.

Instead, the same technological improvements that fueled the recent expansion of natural gas production is allowing producers to tap previously unavailable oil reservoirs in plays including the Eagle Ford in South Texas and the Wolfberry in West Texas.

Copyright (c) 2011, Houston Chronicle

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Wednesday, July 13, 2011

Select Energy Services Acquires Western Company of Texas

- Select Energy Services Acquires Western Company of Texas

Wednesday, July 13, 2011
Select Energy Services LLC

Select Energy Services announced the acquisition of The Western Company of Texas, a Fort Worth, TX, based water transfer company with operations in the Bakken, Barnett, Eagle Ford, Granite Wash and Haynesville.

"Western has grown to become a leading provider of water transfer services in the Bakken Shale and represents a tremendous growth opportunity for our Rockies Region," said John Schmitz, CEO of Select. "Dale Behan and his team have developed significant relationships with many of the leading producers in North Dakota, Texas, Oklahoma and Louisiana, and we look forward to developing those relationships further as we introduce Select's Water Solutions approach to sourcing, transfer, treating, and disposal, while providing the highest quality service in the industry."

This acquisition represents Select Energy Services commitment to become the leading water solutions and oilfield service provider in shale plays throughout the U.S.

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Thursday, June 23, 2011

Caza Reaches TD at Texas Well

- Caza Reaches TD at Texas Well

Thursday, June 23, 2011
Caza O&G Inc.

Caza provided an operational update on the Company's San Jacinto property in Midland County, Texas.

Caza, as operator, announced that the Caza Elkins 3401 well in Midland County, Texas, reached a total depth of 11,854 feet on June 21, 2011. Electric logs indicate multiple potential pay sands for both oil and gas in the Clearfork, Spraberry, Wolfcamp, Strawn, Atoka and Devonian formations. Caza is currently running production casing and preparing the Caza Elkins 3401 well for further completion operations. The completion procedure will include a fracture stimulation program.

The rig has been released and will be moved to the Caza Elkins 3402 well location. The positive results associated with the Caza Elkins 3401 well have caused Caza to revise the target depth on the Caza Elkins 3402 well from 10,500 feet, as previously announced, to approximately 11,800 feet in order to test the Devonian formation. The well should take approximately 30 days to reach the target depth.

Frac crews are extremely busy and therefore difficult to schedule in this area. Given positive results on the Caza Elkins 3402 well, the Company anticipates the initial fracture stimulation procedures on both the Caza Elkins 3401 and 3402 wells to be performed sequentially this August. Given the current environment regarding frac crews, the Company believes that performing these operations sequentially is the most expeditious and economically prudent way forward.

The San Jacinto property covers approximately 480 acres with five proven undeveloped locations, including the Caza Elkins 3401 and 3402 locations. Caza has a 100% working interest before completion and an 85% working interest after completion in the Caza Elkins 3401 well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, including the Caza Elkins 3402 well, Caza will have a 75% working interest and a 56.25% net revenue interest.

W. Michael Ford, Caza's Chief Executive Officer commented, "We are very pleased with the results of the Caza Elkins 3401 well on the San Jacinto property. Log data suggests that the potential pay sections are better than anticipated and we look forward to drilling the Caza Elkins 3402 well and developing this project in due course."

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Monday, June 20, 2011

Little Lizard Could Cause Big Disruptions for Texas Drillers

- Little Lizard Could Cause Big Disruptions for Texas Drillers

Monday, June 20, 2011
Fort Worth Star-Telegram, Texas
by Anna M. Tinsley

Deep in the West Texas sand dunes is something that some say could threaten the state's oil and gas production: A tiny lizard.

But it's not just any lizard: It's a dunes sagebrush lizard, also known as the sand dune lizard.

This little brown reptile is a concern for state officials, who hope that federal officials don't designate it an endangered species. That, they say, could disrupt oil and gas exploration in the heart of Texas' oil country, leading to higher gas prices and shrinking dollars for schools.

"It's reptile dysfunction," said Texas Land Commissioner Jerry Patterson, who oversees the permanent school and university funds, which get money from royalties and leases on some of the potentially affected land. "It has the potential to bring oil exploration and production to a halt."

The U.S. Fish and Wildlife Service, which has had the issue before it for about a decade, is considering protections because oil and gas exploration and ranching are shrinking the lizard's habitat. A decision could come by year's end.

The lizard

The blunt-nosed lizard at the heart of the issue has bright yellow eyes but is barely as long as a person's hand. The lizard is important prey for a number of other species, including some birds and mammals.

It can be found in the West Texas counties of Andrews, Crane, Gaines, Ward and Winkler -- part of the Permian Basin, known to petroleum officials as the most "prolific oil-producing region in onshore America" -- as well as in southeast New Mexico.

There it lives, in the shade of shinnery oak trees, which look like bushes and are found mainly in the sand dunes. The lizard lives only in dunes that have medium-size sand grains.

Environmentalists say the spiny lizard is in danger of extinction because its habitat has been disturbed or removed by oil and gas development. Shinnery oaks, for instance, have been destroyed by drillers, who clear space and move equipment. They have also been killed by ranchers, who say the plant can be poisonous to cattle.

The lizard has been a candidate for endangered status since 2001, when the Center for Biological Diversity asked the federal government to list it. But this proposal was moved forward at least in part because of a federal lawsuit by the environmental advocacy group WildEarth Guardians.

"I think the current federal proposal is based on a number of years of examining the status of the lizard," said Ken Kramer, director of the Lone Star Chapter of the Sierra Club. "It's not a last-minute sort of proposal."

State opposition

Patterson, who has compared the sand dune lizard to Godzilla for its ability to potentially freeze gas and oil work, said this fight is about more than just a reptile.

It's about what he said is a new strategy to gain endangered status for many animals and essentially block industries from doing their work.

"You overwhelm Fish and Wildlife with requests ... and rather than do science on several hundred species, they just settle the lawsuit," he said.Patterson, who has held a sand dune lizard and said it actually is "a cute little bugger," is calling on federal officials to reject the proposed designation.

"The science is not complete, it's out of date, and there's no decent information that has been sufficient to warrant the designation," he said. "If the designation comes, and it isn't based on sound science, we will file a lawsuit."

Texas Agriculture Commissioner Todd Staples, University of Texas System officials and Texas Association of Business President Bill Hammond also oppose the designation.

UT System officials manage more than 2.1 million acres for the benefit of the system, including acreage that could be a habitat for the lizard. They sent a letter to federal officials saying that listing the lizard as endangered is "at best premature" because that decision would be based on "faulty science, inadequate data and seriously erroneous assumptions."

Patterson said that a herpetologist from Texas A&M University has been hired and that studies of the lizard have been commissioned.

The Texas Endangered Species Task Force, primarily made up of property and business owners who could be affected, is developing conservation plans, said R.J. DeSilva, a spokesman for the Texas comptroller's office.

"The goal is to have a plan by November," he said. "There's a need to balance the development of the industry, and economic development in the industry, and take actions to mitigate and preserve the habitat."

Political move?

This year, the Obama administration said a decade's worth of petitions to add wildlife to the endangered species act would be addressed over the next six years.

About 1,400 plant and animal species are designated endangered. Officials work to protect their habitats and review what can be done. Several Texas Republicans in Congress, including Reps. Michael Conaway of Midland, Randy Neugebauer of Lubbock and Francisco Canseco of San Antonio, have asked colleagues to keep the lizard from being designated as endangered. Sen. John Cornyn filed an amendment to prevent federal officials from offering protections to the lizard.

"If the Obama administration has its way, this scaly political pawn will land on the Endangered Species List, without sufficient supporting research to back up the move, and effectively bring new and existing oil and gas production in parts of Texas and New Mexico to a screeching halt," he said in a statement.

Federal officials say they used the best science available and are working with companies to minimize problems or interruptions. Some petroleum companies have signed on to voluntary conservation agreements, agreeing to pay for habitat restoration and use techniques to lessen the impact on the lizards.

Kramer, of the Sierra Club, said he believes that state and industry officials are exaggerating the crisis.

"Practically every time there is a proposal, we get these people saying ... 'The sky is falling. This is going to be the end of civilization as we know it,'" Kramer said. "There is almost always an overreaction based upon their lack of understanding in which the species can be protected."

Copyright (c) 2011, Fort Worth Star-Telegram, Texas

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Friday, June 10, 2011

Caza Charges Ahead at Texas Wells

- Caza Charges Ahead at Texas Wells

Friday, June 10, 2011
Caza O&G Inc.

Caza provided an operational update on the Company's San Jacinto, Bongo and Windham projects.

San Jacinto Property, Midland County, Texas: Caza, as operator, was able to secure a rig ahead of schedule and is currently drilling the Caza Elkins 3401 well on the San Jacinto (Wolfberry) property. The well has reached the intermediate pipe point at 4,670 feet. Caza will run electric logs and cement the 9 5/8ths inch casing prior to drilling ahead. The well should take approximately 25 more days to drill to a total depth of 11,200 feet and is targeting the Wolfberry, Strawn and Devonian formations, which produce oil in the immediate area. All subsequent wells will be drilled to approximately 10,500 feet to test the Wolfberry and Strawn formations. The Caza Elkins 3402 well will be drilled immediately following the Caza Elkins 3401 well with the same rig. The property covers approximately 480 acres with five proven undeveloped locations.

Caza has a 100% working interest before completion and an 85% working interest after completion in the first well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, Caza will have a 75% working interest and a 56.25% net revenue interest.

Bongo Property, Wharton County, Texas: The O.B. Ranch #2 appraisal well, which is a direct offset to the O.B. Ranch #1 discovery well is drilling ahead and is currently on schedule. Intermediate casing was set at 7,600 feet, and the well is currently drilling at 8,811 feet. The Company is pleased to announce that log data has confirmed the presence of natural gas in the Frio formation at approximately 5,530 feet. The well is targeting the Eocene, Cook Mountain interval between 12,400 and 12,900 feet, which is the stratigraphic interval producing in the O.B. Ranch #1 well, with an anticipated total depth of 13,500 feet. Data from this well will be integrated into Caza's ongoing seismic modelling effort in Wharton County, Texas, which will be used to better understand the potential size of the Cook Mountain anomaly at Bongo, as well as other potential targets in the area.

The Company has also completed remedial operations on the O.B. Ranch #1 well. Since completing the operations, the well is producing in line with Company expectations at average daily rates of 92 barrels of oil, 674 thousand cubic feet of natural gas and 37 barrels of water.

Caza has a 45.28% working interest and a 33.51% net revenue interest in the Bongo property and wells.

Windham Property, Upton County, Texas: The Caza 158 #3 well on the Windham property has reached its target depth of 9,824 feet, and Caza has elected to participate in the operator's proposal to complete the well. The operator intends to perforate and fracture stimulate all potentially productive intervals seen on the logs simultaneously within the wellbore, which include the Spraberry/Wolfcamp, Penn and Strawn formations. The Caza 158 #3 will be the fourth well drilled and completed on this property. The Caza 158 #1, 158 #2 and 162 #1 wells are currently at various stages in their respective fracture stimulation programs, but are all producing oil and natural gas.

Caza currently has a 25.0% working interest and an 18.75% net revenue interest in the Windham property and wells.

W. Michael Ford, Chief Executive Officer commented, "We are pleased with the status of our ongoing operations at San Jacinto, Bongo and Windham with all three projects progressing on, or ahead of, schedule. The Company is pursuing a balanced strategy of growing both our production and reserve base in order to build further shareholder value, and these projects should provide continued growth in both these areas along with increased revenues. I look forward to updating the market on the progress of these projects, as well as others, in due course."

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Tuesday, May 24, 2011

Most Drilling-Related Legislation Appears Dead in Texas Legislature

- Most Drilling-Related Legislation Appears Dead in Texas Legislature

Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Aman Batheja

With just a week left in the legislative session, most proposed drilling-related bills appear dead but a handful still have a chance of becoming state law.

Lawmakers filed more than three dozen bills this session that would have affected natural gas drilling operations in the Barnett Shale against a backdrop of increasing concerns about how the process is affecting the environment. For the most part, only bills not opposed by industry have moved forward.

"There's not a lot out there that we're actively fighting right now," said Bill Stevens, executive vice president of the Texas Alliance of Energy Producers. "I think this has been a good session for public policy, not just for the oil and gas industry but for the state."

Gov. Rick Perry recently signed a bill allocating funding for air monitors in the Dallas-Fort Worth area. There are also other bills still in play, including one that would require drillers to disclose most of the chemicals they use in the controversial hydraulic fracturing process.

Drilling critics and environmentalists agree that, as in past sessions, industry has called the shots.

"The industry in Texas is strong," said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club. "They definitely have a seat at the table."

Fort Worth lawmakers

Two Fort Worth lawmakers filed more drilling bills this session than anyone else: state Rep. Lon Burnam and state Sen. Wendy Davis, both Democrats. Several of their bills proposed increasing state regulation of parts of the drilling process or giving local governments more control. Nearly all of their drilling bills, about 20 in total, never came up for votes on the House or Senate floor.

"This industry has controlled state government for over 100 years, and there's nothing to suggest that's going to change," Burnam said.

Several of Burnam's bills were the subject of committee hearings but now remain stuck in different committees. Nearly all of Davis' bills are parked in the Senate Natural Resources Committee. Committee Chairman Sen. Troy Fraser, R-Horseshoe Bay, chose not to hold hearings on more than a dozen drilling bills from Davis. That's a switch from last session, Davis said, when several of her drilling bills not only received hearings when that committee was run by a different chairman but went on to be approved by the full Senate.

When asked about Davis' bills, Fraser said his committee has focused on "the bills that we thought were good public policy that warranted hearings."

Davis said she was able to get three of her proposals added on as amendments to the House version of a bill revamping the Railroad Commission. The House and Senate have passed different versions of the bill. Lawmakers are now working to hammer out the differences, and a major sticking point is whether the agency should continue with three commissioners or switch to just one.

"What I fear is that the debate over the different versions will end up leading to no bill getting passed in time," Davis said.

Rep. Rob Orr, R-Burleson, said he supported several drilling bills proposed by fellow North Texas lawmakers but most did not gain traction this session. "I do not feel like there has been a lot of progress in improvements to the Barnett Shale," he said.

While there still are situations where residents are not happy with the drilling activity in their communities, Orr said he's heard less of an outcry this session than he did when the price of natural gas was higher and companies were in the midst of a leasing frenzy that left some communities frustrated or confused.

One measure that drew bipartisan attention was suspending or limiting a tax exemption on high-cost natural gas production. The exemption, which has encouraged production in the Barnett Shale, accounted for $7.4 billion in lost revenue to the state over the past six years, according to a state report.

Supporters of a pullback said the money could go toward education, but industry officials predict that such a move would deter drilling activity and hurt economic growth. No changes to the tax break appear likely this session.

"That's one we will continue to be vigilant on," Stevens said.

Fracking fluids

The most significant piece of drilling legislation still alive is a measure to require drilling companies to disclose the fluids they use in the controversial practice of hydraulic fracturing.

"We think it will alleviate some of the public fears that are out there right now related to our fracking process," said Debbie Hastings of the Texas Oil & Gas Association.

Reed said the fracking disclosure bill could indirectly lead to safer drilling practices.

"The hope is if you have to disclose, you will be more careful about what chemicals you're using," Reed said.

After months of negotiations with stakeholders, the measure passed the House earlier this month. Though not as strong as some environmental groups and drilling activists had hoped, it has still drawn broad support.

Copyright (c) 2011, Fort Worth Star-Telegram, Texas

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Tuesday, May 10, 2011

Texas Researchers to Study Fracking of Shale Gas

Texas Researchers to Study Fracking of Shale Gas

Tuesday, May 10, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith

University of Texas at Austin researchers will conduct "a comprehensive review of the science, policy and environmental issues surrounding hydraulic fracturing of shale gas," the school's Energy Institute announced Monday.

North Texas' Barnett Shale will be included in the study, which will examine the controversial process that pumps huge volumes of water and sand, plus much smaller amounts of chemicals, under extremely high pressure to create fractures in rock and release trapped oil and natural gas.

The project "will for the first time combine an independent assessment of alleged groundwater contamination and seismic events" ascribed to hydraulic fracturing, or "fracking," of shale formations "with a detailed analysis of the scope and effectiveness of laws and regulations" related to the process, the announcement said.

The project is expected "to get started straight away," Gary Rasp, communications director for the Energy Institute, told the Star-Telegram. Preliminary findings are expected by the end of October and a final report by the end of this year, he said.

The Environmental Protection Agency is conducting its own fracking study but doesn't expect to have initial findings before the end of 2012. The EPA study is also expected to include portions of the Barnett Shale.

The Energy Institute is providing the approximately $300,000 for its study, Rasp said.

"What we're trying to do is separate fact from fiction," Dr. Raymond L. Orbach, director of the Energy Institute, said in a statement. "Unlocking huge reserves of natural gas could be vital to our nation's energy security. If proven to be safe and environmentally benign, fracking could unleash a bountiful supply of domestic energy for generations, if not centuries, to come."

The research team "will investigate specific claims of groundwater contamination, seismic events, fugitive air emissions and other concerns" associated with fracking in the Barnett, Marcellus and Haynesville shales, the announcement said.

The Barnett Shale underlies more than 20 North Texas counties, including Tarrant and Johnson, the leading natural gas-producing counties in Texas. The Marcellus is in the Appalachian region of the eastern U.S, most notably in Pennsylvania and West Virginia, and the Haynesville is in northwest Louisiana and East Texas.

Copyright (c) 2011, Fort Worth Star-Telegram, Texas. Distributed by McClatchy-Tribune Information Services.

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ExxonMobil Launches EOR Project in West Texas

ExxonMobil Launches EOR Project in West Texas

Tuesday, May 10, 2011
Exxon Mobil Corp.

ExxonMobil Production Co. announced Tuesday that drilling and construction have started on an enhanced oil recovery project at the Means Field in Andrews County, Texas. The first phase of the project has the potential to recover as much as five million barrels of additional oil, an amount equal to the annual energy needs of about 170,000 Texas households.

ExxonMobil has more than two decades of experience with carbon dioxide injection for enhanced oil recovery at the Means Field. The new project will apply technology to produce oil that until recently was technically and economically challenging to develop. Carbon dioxide injection is expected to begin before year end 2011. This first phase could lead to future development phases, which could significantly increase oil recovery from the field.

"ExxonMobil's investment in the field is part of an ongoing effort to find, develop and produce more domestic supplies of oil and gas to meet the country's growing energy needs," said Lyndal Trout, the company's senior field superintendent for western Texas.

ExxonMobil discovered the Means Field in the early 1930s. Since then, the company has produced more than 300 million barrels of oil from the field.

Over the past three years ExxonMobil's capital expenditures in Texas has exceeded $790 million. These investments help create jobs and contribute to economic growth across the region. They also help maintain Texas' position as the leading U.S. oil and natural gas producing state.

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Monday, May 9, 2011

Linn to Acquire Texas Panhandle, Okla. Properties for $220M

Linn to Acquire Texas Panhandle, Okla. Properties for $220M

Monday, May 09, 2011
LINN Energy, LLC

LINN Energy, LLC announced Monday that it signed a definitive purchase agreement with Panther Energy Company, LLC and Red Willow Mid-Continent, LLC to acquire 40 percent of their oil and natural gas properties located in Ochiltree and Lipscomb counties, Texas and Ellis County, Oklahoma for a contract price of $220 million, subject to closing conditions. The Company anticipates the acquisition will close on or before June 1, 2011, and will be financed with net proceeds from the recently announced senior notes offering.

"The acquisition of these properties enhances LINN's overall position in the Texas Panhandle area, and marks our entry into the liquids-rich window of the horizontal Cleveland play in the Anadarko Basin," said Mark E. Ellis, President and Chief Executive Officer of LINN Energy. "Partnering with Panther will align us with an experienced and efficient operator that has been active and successful in this area for several years. This acquisition provides high rate-of-return projects and we expect it to be immediately accretive to our unitholders."

Bob Zahradnik, Chairman of Panther Energy, added, "We have created significant value in the Anadarko Basin, and we look forward to developing this area with a solid partner like LINN Energy. This divestiture is a tactical transaction to fund the substantial capital demands of our successful programs in the deepwater Gulf of Mexico and West Texas."

Significant characteristics of the assets are:
  • Net production of approximately 2,700 barrels of oil equivalent per day from approximately 170 producing wells;
  • Proved reserves of approximately 10 million barrels of oil equivalent (45 percent oil, 37 percent proved developed);
  • Total acreage position of 140,000 gross (44,000 net) acres; and
  • More than 165 proved low-risk infill drilling locations.

LINN Energy's mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. LINN Energy is a top-20 U.S. independent oil and natural gas development company, with approximately 2.8 Tcfe of proved reserves in producing U.S. basins as of Dec. 31, 2010 (pro forma for pending and closed 2011 acquisitions).

The Southern Ute Growth Fund is the majority owner and funding partner of Panther Energy, LLC and the parent company of Red Willow. Panther and Red Willow have E&P and midstream operations throughout the Rockies, Mid-Continent, Permian Basin, West Texas and the Gulf of Mexico. The Growth Fund oversees the business of the Southern Ute Indian Tribe.

Scotia Waterous (USA) acted as financial advisor to Panther Energy Company, LLC and Red Willow Mid-Continent, LLC in this transaction.

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Wednesday, May 4, 2011

API: Oil and Gas Industry Supports 2M Texas Jobs

API: Oil and Gas Industry Supports 2M Texas Jobs

Wednesday, May 04, 2011
American Petroleum Institute

The U.S. oil and natural gas industry supports two million jobs in Texas and 24 percent of the state's economy, according to a new study commissioned by API and conducted by PwC (PricewaterhouseCoopers LLP).

API President and CEO Jack Gerard said the president and Congress should keep the study's findings in mind as they debate greater access to domestic oil and natural gas and higher taxes on energy.

"Increasing energy taxes raises costs for businesses, which may impact consumers, and it threatens the two million jobs our industry supports in Texas," Gerard said. "Higher taxes would also depress energy production over the longer term, reducing royalties and income taxes collected by the government."

The new report updates data from a previous report and shows that, between 2007 and 2009, the economic activity supported by the industry nationwide actually increased in size as a percentage of U.S. GDP, from 7.5 to 7.7 percent. The industry supports 9.2 million jobs in the U.S.

"The people of the U.S. oil and natural gas industry are the backbone of our economy," Gerard said. "They provide most of the nation's energy, spurring job growth across America. Even during times of economic recession, the oil and natural gas industry stands strong."

Click here for a copy of the new study.

API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $85 million in revenue to our government every day, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

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Monday, April 18, 2011

SmarTrend Market Close Wrap-Up: April 18, 2011

SmarTrend Market Close Wrap-Up: April 18, 2011



Apr 18, 2011

The major U.S. equity indices closed lower Monday after Standard & Poor's Ratings Services lowered its outlook on the U.S.

S&P's Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the U.S. It also revised its outlook on the long-term rating to negative from stable.

Crude futures for May delivery fell 2.48% lower to $106.94 a barrel on the New York Mercantile Exchange.
In corporate news, Texas Instruments (TXN) reported Q1 revenue of $3.39 billion, in line with the analyst expectations. EPS was $0.55, vs. expectations of $0.58 per share. For Q2, the company expects revenue in the range of $3.41 to $3.69 billion and EPS of $0.52 to $0.60 per share.

The Dow Jones Industrial Average (DJI) closed 1.14% lower at 12,201, the S&P500 (INX) closed 1.10% lower at 1,3.05, and the Nasdaq Composite (IXIC) closed 1.06% lower at 2,735.

Friday, April 8, 2011

Chevron Rekindles Old Texas Flame

Chevron Rekindles Old Texas Flame

Friday, April 08, 2011
Dow Jones Newswires

Friday, April 1, 2011

Lucas Energy Up on JV With Marathon Oil Unit in Texas

Lucas Energy Up on JV With Marathon Oil Unit in Texas



Lucas Energy (LEI) is up after it says it entered into a Joint Venture agreement with Marathon Oil (East Texas) LP, a subsidiary of Marathon Oil Corporation (MRO) to develop the Eagle Ford and Buda formations in Wilson County, Texas.

The Marathon affiliate has acquired 50% of the leasehold interest rights, representing approximately 1,000 net acres (below the base of the Austin Chalk formation) held by Lucas in a majority of Lucas' leases in Wilson County, Texas.

Marathon Oil Corporation's subsidiary will be the operator of the joint venture, but Lucas will still own and operate rights above the Eagle Ford, primarily the Austin Chalk formation.