Updated 4/5/19
Industry News from the Permian Basin
EagleClaw Midstream begins operations at Pecos Bend IV plant
Midland-based EagleClaw Midstream, a portfolio company of Blackstone Energy Partners and I Squared Capital, said last week it started commissioning its fourth cryogenic processing plant, Pecos Bend IV, with full operation scheduled next month. The completion of Pecos Bend IV will increase EagleClaw’s total interconnected processing capacity in the Delaware Basin to 1.3 Bcfd.
EagleClaw Midstream also said it made a final investment decision to proceed with construction of the Delaware Link pipeline, a new pipeline designed to transport residue natural gas from the Delaware Basin to the Waha hub.
Study of water issues by Drillinginfo, B3 Insight to be released
The first volume of a study of water issues in the Permian Basin is expected to be released to subscribers next month by Drillinginfo, an oilfield data company, and B3 Insight, a water data company. A lack of pipeline infrastructure to move crude oil and natural gas to market was previously considered the primary constraint to industry development in the Permian Basin, according to the Houston Chronicle, but now attention is turning to water issues in the region. Bernadette Johnson of Drillinginfo said, “Next to pipeline bottlenecks and constraints, water is the single most important issue in the Permian.” Using proprietary data from both companies, the four-part study analyzes the impact of production on water issues over the next 10 years in high commodity prices and low commodity prices.
Texas ends 12 weeks of declining rig counts by adding 8 for 499
A 12-week streak of declining rig counts in Texas ended with Baker Hughes’ April 5 report that the state added 8 in the previous week to reach 499 active rigs. Baker Hughes said rigs also were added in Permian Basin, New Mexico and U.S. in the past week. As of April 5 there were 462 rigs in Permian Basin (up 8 in past week), 107 in New Mexico (up 3) and 1,025 in U.S. (up 19), including 831 oil-directed rigs (up 15).
Permian Basin’s leading county, Reeves, lost a rig for a new total of 69, but Lea, N.M., County added 1 to 55, and Eddy, N.M., added 4 to 50. Other Permian Basin leaders were Midland County with 42 rigs (down 1 in past week), Martin also with 42 (up 1), Howard with 25 (down 1), Loving with 24 (down 1) and Ward with 26 (down 3).
Other leading states as of April 5 were Oklahoma with 107 rigs (down 1 in past week), Louisiana with 65 rigs (unchanged) and North Dakota with 61 rigs (up 1). Other leading regions as of April 5 were Eagle Ford with 78 rigs (unchanged in past week), Marcellus with 68 rigs (up 3), Williston with 61 (up 1) and Haynesville with 58 (up 1).
Callon Petroleum sells non-core assets in Midland Basin
Houston-based Callon Petroleum said Monday it has reached agreement to sell certain non-core assets in the Midland Basin for an initial price of $260 million. The assets include Callon’s Ranger operating area in the southern Midland Basin of 9,850 net Wolfcamp acres, more than 80 producing horizontal wells, and 70 net delineated locations. Daily production from these assets averaged about 4,000 boed (52 percent oil) in February. Callon also recently completed a trade that expanded its contiguous position in northwest Howard County by 167 net acres.
Midland distributor Cactus Fuel sold by Hastings to Pilot Thomas
Houston-based Hastings Equity Partners said last week it sold assets of Midland-based Cactus Fuel to Pilot Thomas Logistics. Cactus is a value-added distributor of fuel and lubricants to upstream and midstream customers in the Permian Basin.
NextDecade reaches 20-year LNG agreement with Shell NA
Houston-based NextDecade said April 1 it has entered into a 20-year LNG supply agreement with Shell NA. The agreement with Shell is for two million tonnes per year of liquefied natural gas from NextDecade’s Rio Grande LNG export project (27 million tonnes per year) in Brownsville. NextDecade said the agreement is “the first-ever long-term contract with LNG produced out of the U.S. to be indexed to Brent and comes with full destination flexibility.” Commercial operation of Rio Grande LNG is expected in 2023.
Matt Schatzman, president and CEO of NextDecade, said, “We look forward to finalizing additional commercial agreements and to proceeding with the development of our Rio Grande LNG project.” NextDecade is an LNG development company focused on export projects and pipelines in Texas.