Shale Update

By North American Shale magazine staff | February 09, 2018

Niobrara
A major DJ Basin producer formed after Bill Barrett Corp. and Fifth Creek Energy combined. Once approved, BBC will have increased its DJ Basin position by 112 percent and the number of undeveloped locations by 70 percent. Most of the acreage is already held by production and is adjacent to shale super producer EOG Resources. Some of the acreage is located next to the Jake well, the first horizontal test well drilled in 2009 that led to the activity in the DJ Basin.

RS Energy Group and Anadarko Petroleum Corp, have formed a collaborative partnership to integrate proprietary RSEG intelligence and analytics with Anadarko’s internal data. Anadarko will use the new data intelligence on its acreage in the DJ and the Delaware.

Permian
The Permian is a Phoenix, rising from the ashes to new heights. While some believed the region was dead, according to researchers from IHS Markit, the world’s hottest shale play is now on pace to shatter production records previously recorded in 1973. Calling it a global disrupter, IHS said the Permian will play a major role in helping the U.S. exceed 10.5 million barrels of oil produced by the end of 2018.

This year, oil major Chevron will invest $3.3 billion into the Permian. The goal is to spend capital on projects that will yield returns in roughly two years. The total 2018 budget for Chevron is $18.3 billion. At oil prices comparable to 2017, Chevron expects to deliver production growth and reach free cash flow.

With its $483 million acquisition of Forge Energy’s Delaware Basin position, Oasis Petroleum is no longer a Bakken pure-play producer. Oasis executives have a long history in the Texas play and also said they had a good relationship with the Forge team, which to date, has only drilled nine horizontal wells in an acreage block that could support over 600. The purchase will not change the view Oasis has on the Williston Basin, but it will give the company a position in the core of each shale play.

Eagle Ford
Vitol, a global energy and commodity trading company that trades more than 7 million barrels of crude oil per day, has begun talks with Harvest Pipeline Co. on a new crude oil terminal located near Corpus Christi, Texas. As the first energy trader to export U.S.-based shale oil following the removal of the export ban on U.S. crude, Vitol believes U.S. shale oil will only grow in demand throughout the world. Harvest believes its Midway junction line located in the Eagle Ford would be able to send barrels from the Eagle Ford to Corpus Christi. Permian barrels would also benefit from the new terminal, according to Harvest.

Bakken
With two existing NGL pipelines operating at capacity and more NGL supply in production, ONEOK Inc. is planning a new 900-mile pipeline to move NGL’s from the Williston Basin to facilities in Cushing, Oklahoma. Set for a planned capacity of 240,000 barrels of unfractionated NGLs per day, the infrastructure could be completed by the end of 2019 at a cost of roughly $1.4 billion. The Elk Creek Pipeline will help producers in North Dakota that are required to capture a set percentage minimum of associated gas extracted during oil recovery.

SCOOP/STACK
Morgan Stanley Energy Partners has chosen Durango Midstream as its partner for exposure to the SCOOP and STACK plays of the Midcontinent. Through equity provided by MSEP, Durango will build upon its infrastructure assets in the Oklahoma county of Grady. Richard Cargile, formerly president of Midstream Operations at Energy Transfer Partners L.P., is leading Durango Midstream’s efforts in a region that Robert Lee, managing director for MSEP said offers “exceptional” opportunities.

Haynesville
Goodrich Petroleum will spend up to $75 million this year to increase production across its Haynesville acreage by nearly 150 percent. Goodrich has hedged 40 to 42 percent of its expected natural gas volumes for the year at a blended average price of $3.02 and 50 to 55 percent of expected crude oil volumes for the year at $51.08.

Marcellus/Utica
For $93.7 million, Pennsylvania-based Eclipse Resources Corp., will add roughly 87 drilling locations spread throughout 44,500 acres of prime Utica dry gas areas. The Flat Castle acreage will be purchased from Travis Peak Resources and will allow Eclipse to drill 16,000 foot laterals targeting Utica dry gas formations. With its midstream subsidiary, Eclipse also acquired Cardinal NE Holdings LLC for $18.3 million in a move that will net Eclipse the midstream gathering assets that were already being used on the Flat Castle acreage.