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Wednesday, September 16, 2015

Wednesday, September 15, 2015

Headlines from sites you all visit that caught my eye:
Active rigs:


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RBN Energy: will takeaway capacity in the Eaglebine boost production?
Blueknight Energy Partners’ 100 Mb/d Knight Warrior pipeline is currently under construction and due online in Q2 2016 to deliver crude from the developing Eaglebine play to the Houston Ship Channel. It complements the 60 Mb/d Sunoco Logistics Eaglebine Express pipeline to Nederland, TX that opened last December.
Today we discuss how the promising but relatively complex nature of Eaglebine drilling could scare off producers until prices move substantially higher than today’s levels.
It’s been a year since we took an in-depth look at the Eaglebine play (also known as Eagle Ford East and East Eagle Ford), and a lot’s happened.
For one thing, the price of West Texas Intermediate crude oil has fallen sharply (from about $90/Bbl then to less than $50/Bbl now); for another, the first oil pipeline out of the Eaglebine (Sunoco Logistics’ Eaglebine Express) has been completed and can now move up to 60 Mb/d to its Nederland crude terminal in Port Arthur, TX. As we said in our last update on the Eaglebine, the play is located on the northeastern trend of the Eagle Ford where the Eagle Ford Shale meets the Woodbine Sandstone.
Most of the drilling in the Eaglebine has taken place in these counties (in order of June 2015 oil production volumes, highest to lowest): Brazos, Madison, Leon, Grimes, Polk and Walker. The play got off to a slower start than the Eagle Ford, in part because the Eaglebine formation (up to 1,000 feet thick, and found at depths of between 6,500 and 15,000 feet) has been more complex for drillers to exploit.
The Eaglebine and Eagle Ford share similar geology--both are situated above the Buda Formation and below the Austin Chalk—but the Eagle Ford is a carbonate rich organic, while the Eaglebine contains a large percentage of silica-rich sands interlaced in the organic rich shale, and that makes Eaglebine completion and production complicated. Still, the Eaglebine has high hydrocarbon potential, including a mixture of oil and condensate liquids. In other words, it’s too promising a play to ignore, particularly given its proximity to Gulf Coast refineries.

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