By May 22, 2015 Read More →

Eagle Ford shale activity showing signs of life

130 car frac sand unit train one of largest ever for Eagle Ford

Activity is slowly returning to the Eagle Ford as oil prices flirt with $60 and production slowly begins to rise.

Eagle Ford

Small increase in drilling rigs operating in the Eagle Ford.

In South Texas, Eagle Ford basin crude oil production averaged 1.6 million barrels in March, up 344,000 incremental barrels per day (b/d) or 28 per cent from March 2014, according to Sami Yahya, Bentek energy analyst.

The Platts Eagle Ford Marker, a daily price assessment launched in October 2012 and reflecting the value of oil out of the Eagle Ford Shale formation in South Texas, is up 25% since mid-March, with an average price of $53.30 per barrel (/b) for the year. The marker has ranged between $46.22/b and $62.20/b since the beginning of January.

“Producers in both the Eagle Ford and Bakken [North Dakota] basins are still maintaining their production levels by high-grading their acreage and pushing for better efficiencies,” said Yahya. “The current average economic return for the two basins is 17 per cent. However, the downside risk is that some producers may elect to increase their number of drilled-but-uncompleted wells in the near-term until they figure out their cash flow status, which will further flatten or bring down production levels.”

There was a small increase in drilling rigs operating in the Eagle Ford, 125 last week, up from 122 earlier in May.

One sign of an improving oil patch is Twin Eagle Resource Management’s announcement Friday that it has landed its first 130 car frac sand unit train at Mission Rail in Elmendorf, which is in the heart of the Eagle Ford Shale. The train was off-loaded into Twin Eagle’s new 60 million pound frac sand silo system, which is also one of the largest in the country. The silo system is scaled to house up to 300 railcars worth of frac sand and can load a truck in less than two minutes, according to a Twin Eagle press release.

“Longer laterals, more stages and closer spacing of wells are increasingly common in today’s shale plays, which is why frac sand intensity per well continues its rise,” said Griff Jones, Twin Eagle’s CEO. “We believe that world-class terminal infrastructure like what we have developed at Mission Rail is necessary to reduce logistics costs of completing wells and improving our customers’ breakeven costs of completion.”

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