Texas Drilling Observer
Current Texas Oil & Gas Industry Statistics
» This past December there were 1,009 drilling permits issued statewide by the Texas Railroad Commission. By comparison there were 727 drilling permits issued by the Commission during December 2015. November 2016 crude oil production from Texas averaged 2.41 million barrels per day, up from the 2.36 million barrel per day average of November 2015 (these figures do not include condensate from gas wells). Natural gas production from Texas wells averaged 19.04 Billion cubic feet per day in November 2016. That’s down from the November 2015 gas production average of 19.88 Bcf per day (these figures include casinghead gas production volumes). These preliminary figures are based on oil and gas production volumes reported by operators and will be updated by the Texas Railroad Commission as late and corrected production reports are filed. Over the last 12 months, total Texas reported production was 982 million barrels of oil and 8.0 trillion cubic feet of natural gas. Texas production in November2016 came from 181,475 oil wells and 92,930 natural gas wells.
|New RRC Rules go into Effect Regarding Gas Well Testing & Inactive Wells|
» New Texas Railroad Commission rules went into effect at the start of this year that will ease burdens for required semi-annual testing of natural gas wells and reduce the monthly production levels required for oil and gas wells to be classified as active. The new gas well testing requirements allow for estimated shut-in well head pressures to be reported, rather than measured, so long as it is accompanied by a letter from a licensed professional engineer. The Commission identified this change as a significant cost saving measure for the industry. The rule changes regarding inactive wells that went into effect January 1st allow an active well to be defined as one that produces at least 5 barrels of oil per month or 50,000 cubic feet of gas per month for at least three consecutive months or at least 1 barrel of oil per month or 1,000 cubic feet of gas per month for 12 consecutive months. The old rules required double that amount of production for a well to be classified as active. Allowing more low volume producing wells to be classified as active will save operators time and money by exempting them from the additional regulatory requirements imposed on inactive wells across the state.
|Second SMU/UT Study Points to Link Between Quakes, O&G Activity|
» Researchers at the University of Texas and Southern Methodist University have once again released a report linking oil and gas operations to increasing numbers of small magnitude earthquakes across the state. The most recent study concludes that earthquakes triggered by oil and gas industry activity have been occurring as far back as 1925 and the number of earthquakes with a magnitude of 3 or greater have increased since 2008 from about 2 per year to 12 per year. The study stopped short of identifying any specific industry practice that could be targeted for regulatory action in curtailing induced seismic activity.
|U.S.G.S. Gives 20 Billion Barrel Reserve Estimate for Wolfcamp Shale|
The U.S. Geological Survey
reported that the Wolfcamp Shale covering a large section of
Carthage Acquisition Announced by Castleman Commodities
» Connecticut based Castleman Commodities has closed a major acquisition from Anadarko Petroleum, a well known independent operator with extensive operations across the state. Castleman reported in a recent release that it had acquired over 160,000 acres of leasehold in East Texas from Anadarko in the Carthage area. This acreage is productive in the Haynesville Shale and other natural gas bearing reservoirs. The $1 billion deal also included purchase of Anadarko’s natural gas gathering and processing pipeline assets in the area.
|Interim Charges Assigned to Natural Resources Committee|
» Lt. Governor Dan Patrick recently issued an interim charge for the state Senate’s Natural Resources Committee – to study new mandates from the EPA and their impacts on the Texas Economy. The Committee will also investigates the state’s permitting processes with respect to the energy and environmental side and determine if those processes could be made more competitive and business friendly. Lastly, the issue of theft in the oil field, an issue that was addressed in the most recent legislative session with harsher criminal penalties proposed, will also be investigated. Any recommendations arising from these interim charges could not be acted upon until 2017, the next time that the legislature is in session.
Meets with Energy Delegation from Mexico
» Texas Railroad Commissioner Christi Craddick met with a delegation of energy officials from Mexico recently to discuss regulatory issues concerning development of oil and gas shale formations. Craddick stated that the Railroad Commission is a ready source of expertise on the oversight of shale development and is a natural partner for Mexico to coordinate with since the state’s most active shale play – the Eagle Ford – extends well into Mexico. According to Rigzone News, The Eagle Ford Shale in Mexico’s Burgos Basin contains an estimated 343 trillion cubic feet of recoverable natural gas, which is about two thirds of Mexico’s recoverable shale gas resources. Mexico’s energy agencies are currently working on contractual terms for an upcoming auction of contracts to sell to the private sector for development of the country’s shale resources. The sale is expected to include some of Mexico’s Eagle Ford Assets.
|Compulsory Unitization Bill Filed|
» Compulsory unitization will once again be considered during the 2017 legislative session. Current law requires that at least 66 percent of royalty owners agree to unitize their interests into a single project which is usually done to facilitate enhanced oil recovery operations in an oil field such as a waterflood project. Any royalty owner that does not agree to join the unit has their interests continue to be treated according to the terms of their lease. Compulsory unitization would force all owners to join the unit once a certain percentage of the overall interest owners in an area agree – making it easier for oil companies to conduct enhanced oil recovery operations in a field because they no longer have to worry about dancing around non-participating owners. The Bill, recently filed as Senate Bill 177 is titled the Majority Rights Protection Act, and represents the fourth time in recent years that a compulsory unitization bill and been argued during the legislative session. Proponents argue that it allows much higher oil recovery from fields and approval of project that would otherwise not be feasible – increasing the royalty revenue for landowners – while those against it argue that it runs afoul of private property rights.
Noble Acquires Clayton Williams Energy
Anadarko Selling South Texas Eagle Ford Assets
» Anadarko Petroleum recently announced that it would be selling its Eagle Ford producing properties in
Patrick C. Forbis
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