Black Friday -- The Propane Story Gets More And More Interesting; Interesting Shale Plays To Watch In 2014

Active rigs: 191

RBN Energy: Part 2 in the series on the propane shortage in the midwest for drying corn.

The northern corn-belt states are winding down from a very wet bumper crop of corn which has required a lot of grain drying, fired by propane.  That has translated into a shortage of propane supplies – so much so that seven governors recently issued emergency orders to expedite propane deliveries to their states. 

Now, with about three weeks left before the official onset of winter (and it feels like winter already), 2013 Midwestern propane problems should be behind us. 

But what about next year?  In 2014, Cochin pipeline – one of the most significant traditional sources of propane for the region goes away.  Kinder Morgan (current owner and operator of Cochin) is reversing the system and turning it into a diluent pipeline.  Volumes of propane previously delivered by Cochin must come from somewhere else.  Today we’ll continue our series looking at upper Midwest propane and how the region is likely to adjust in the post-Cochin market.

Over at Rigzone, long article on the shale plays to watch in 2014. For example:

The Eagle Ford unconventional play in South Texas has proven prolific in terms of oil production, but activity on other formations within the Eagle Ford area will expand. While the Pearsall shale will not likely be a huge play, Gilmer said DrillingInfo is seeing interesting things in the Buda formation.

Both the Pearsall and Buda plays are located below the Eagle Ford – the Buda located deeper than the Eagle Ford and Pearsall the deepest – varying in depth ranging from 7,000 feet to 12,500 feet. Buda exploration is occurring in the eastern portion of the Eagle Ford play area, while Pearsall development is taking place in the western half of the Eagle Ford.

 A couple of Buda wells have come online pretty strongly in the dead oil zone of the Eagle Ford proper, an area where companies had leased, hoping for oil, but not enough gas exists to make it mobile. But when operators started drilling deeper into the Buda, they “walked into a window of mobility, so it looks like a second life for a lot of those leases.”

SeekingAlpha has an article on ETP.  A nice map at the link.

The map depicts Energy Transfer Partners' asset footprint in the United States. ETP's assets are concentrated in the South of the US, especially in Texas. Energy Transfer Partners has a particular strong position in the Eagle Ford area and is massively adding to its processing capacity. In 2010, ETP had an Eagle Ford processing capacity of 120 Mbpd and expects to grow its capacity to 1,340 Mbpd in 2014. Eagle Ford is one of the highest-impact drilling areas in the US and the expansion of processing capacity will serve the company and its unitholders well in the future.

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The Wall Street Journal would normally be placed here, but this post has already gotten pretty long, so I will go to a new post.