You can now order specialized weekly statewide regional reports for a fraction of the price of our Statewide Report.

Try out our oil and gas information reporting service by signing up for four free issues, one month of service, a $32 value.

*****************

- News Bits -

 
*- EOG will Modify its Eagle Ford Consolidation Application
The application filed by EOG Resources Inc. to consolidate all fields producing from the Eagle Ford Shale Formation in Railroad
Commission Districts 1, 2 and 4 into the Eagleville (Eagle Ford) Field and to adopt temporary oil and gas field rules for the Eagleville
(Eagle Ford) Field, was withdrawn on Friday, July 25th (Oil & Gas Docket 01-0265787). The protests to the application had been filed
by numerous parties. Mr. Doug Dashiell, who represented EOG in the matter, stated that it is EOG’s intent to file a revised application
to establish multiple consolidated fields for the Eagle Ford in Gonzales, Wilson, Karnes, La Salle, DeWitt, Frio, Atascosa and McMullen
Counties and to seek special oil rules only for those consolidated fields. (Source: Texas Drilling Observer)

*- ExxonMobil Announces Completion of All-Stock Transaction for XTO
Exxon Mobil Corp. announced that it has completed its agreement with XTO Energy Inc., creating a new organization to focus on global development and production of unconventional resources. “We believe gas is the fuel of choice for power generation, producing fewer greenhouse gas emissions than other electrical-generation fuels, such as coal.” Under the agreement, approved by XTO stockholders at a special meeting Friday, the new organization will continue to be known as XTO Energy Inc. and maintain its head office location in Fort Worth, Texas. (Source: ExxonMobil)

*- Eagleford Oil Discovery Reported in Zavala County
Petrohawk Operating Company out of Houston, Texas has filed a new field discovery application for its Mustang Ranch Lease, Well No. 1H (API No. 42-507-32744), proposed Red Hawk (Eagle Ford) Field, located in Section 19, Block 12, I&GN RR Co Survey, Abstract 413, located 10.5 miles northwest of the town of Crystal City, Texas. The well encounters the top of the Wildcat ‘Eagle Ford’ Reservoir at 5,385’ (-4,763’ subsea) and the base of the reservoir at 5,560’ (-4,938’ subsea). The discovery well was completed on 3-15-2010 and had an initial 24 hr. test (on 3-26-2010) of 381 barrels of oil per day, 30 mcf of casinghead gas per day and 316 barrels of water per day on pump. The gravity of the oil is 31.8 degrees API. The well produces from a horizontal section from 5,567’ measured depth to 10,771’ measured depth. That interval was fracture stimulated with 1,255 barrels of 15% HCL and 4,922,669 pounds of sand. (Source: Texas Drilling Observer)

*- Oil Discovery Reported in Fannin County Texas
Kim Recovery Enterprises LLC out of Greenville, Texas has filed a new field discovery application for its Ryser Lease, Well No. 1 (API No. 42-147-30113), proposed Honey Grove (Simpson Sand) Field, located in the George Dillard Survey, Abstract 296, located 5.5 miles northwest of Honey Grove, Texas. The well encounters the top of the Wildcat ‘Simpson Sand’ Reservoir at 8,035’ and the base of the reservoir at 9,228’. The discovery well had an initial rate of 440 barrels of oil per day with some load water and casinghead gas amounts too small to measure. The gravity of the oil is 42 degrees API. The well has perforations from 8035’-8044’, 8104’-8113’, 8378’-8385’, 8418’-8423’, 8442’-8446’ and 8519’-8523’. There are no other producing oil or gas wells, other than the subject Ryser #1, in Fannin County. Kim Recovery has a permit to drill its Yarborough #1, within 2-1/2 miles of the Ryser #1, in the Daniel W. Morrison Survey, A-726. (Source: Texas Drilling Observer)

*- RRC Considers Approval of Unit for CO2 Flood in Oyster Bayou Field
Denbury Onshore LLC requested unitization and secondary recovery authority and entity for density status for the proposed Oyster Bayou Field Unit, Oyster Bayou Field, Chambers County, at a Railroad Commission hearing held on Thursday, May 27th. The unit agreement for the proposed Oyster Bayou Field Unit is the first such agreement in the State of Texas that includes provisions that provide for future carbon dioxide sequestration after enhanced oil recovery operations have concluded. The Oyster Bayou Field was discovered in 1941. Cumulative production from the field is approximately 143 million BO. The proposed Oyster Bayou Field Unit consists of 8 tracts which contain 3,912 acres. Primary recovery has already resulted in the recovery of 62% of the 231 million barrels of original oil-in-place. Estimated secondary recovery from the unit is estimated to be 143 million BO, or an additional 10% of original oil-in-place. Original reservoir pressure was 3,800 psia and current reservoir pressure is 1,900 psi. The reservoir will be re-pressured to about 4,000 psi during the first year of the project. Denbury plans to implement the CO2 flood using a 160 acre 9 spot injection pattern. It is possible that later in the life of the project, the patterns will be reduced to an 80 acre 5 spot pattern. (Source: Texas Drilling Observer)

*- Kinder Morgan Requests Approval of ‘Super Unit’ in Katz Field Area
At a Railroad Commission hearing held on Friday, March 5th, Kinder Morgan Production Co LLC requested Commission authority for unitization of the proposed Katz (Strawn) Unit and approval of CO2 injection operations on the Unit, located in Stonewall, Haskell, King and Knox Counties. Kinder Morgan calculated the original oil in place to be 200.4 MMBO. Primary recovery from the field was estimated to be 30.1 MMBO or 15% of the original oil in place. Secondary recovery was estimated to be 40.1 MMBO or 20% of the original oil in place. Kinder Morgan estimates that the CO2 injection project will result in the recovery of an additional 23.8 MMBO or 12% of the original oil in place, resulting in an ultimate recovery for the field of approximately 50% of the original oil in place. Kinder Morgan plans to drill 88 new wells and workover 50 of the existing wells. The total cost to implement and operate the CO2 injection project is expected to be $145 million. The estimated net present value over the life of the project after all costs are recovered is expected to be $389 million. This estimate is based on an oil price of $60 per barrel. The CO2 will be delivered to the Katz (Strawn) Field via a newly constructed 91 mile 10 inch pipeline from the Kelly Snyder Field area.  (Source: Texas Drilling Observer)

*- Denbury Resources Agrees to Purchase Conroe Field and Sell Remaining Barnett Shale Assets
Denbury Resources Inc. announced that it has entered into an agreement with Wapiti Energy, LLC (“Wapiti”) a Houston based privately-owned company to purchase a 95% working interest in the Conroe Field, a significant potential tertiary flood north of Houston, Texas, for approximately $430.7 million consisting of $256.4 million in cash and 11,620,000 shares of Denbury common stock. The number of shares of Denbury common stock to be issued in the acquisition is fixed and equate to a value of $174.3 million assuming a stock price of $15 per share. The transaction is expected to close on or before December 18, 2009. The Company plans to fund the cash portion of the purchase initially with bank debt, but expects to cover approximately $210 million of the cash portion of this purchase with the sale of its remaining Barnett Shale assets. (Source: Denbury Resources)

*- El Paso Reports Initial Results from First Eagleford Well
El Paso announced that its first Eagle Ford shale well in La Salle County, Texas (Briscoe-Nunley GU - Well # 1H) was recently drilled with a 4,000 foot horizontal lateral and completed with a 16-stage frac. The well is still cleaning up with volumes steadily increasing. The current flow rate is approximately 6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi. The company has almost doubled its lease position to 112,000 net acres. El Paso will maintain a one-rig program as it progresses in this new play. (This article is a portion of a release from El Paso Energy). The Briscoe-Nunley GU #1H is located in Section 42, BS&F Survey, Abstract 1798, being 11.7 miles northeast of Encinal, Texas). (Source: El Paso E&P)

*- Eagle Ford Shale Discovery in Webb County
St. Mary Land & Exploration Co. out of Houston, Texas has filed a new field discovery application for its Briscoe AR Lease, Well No. 1H (API No. 42-479-40603), proposed Apache Ranch (Eagle Ford) Field, located in Section 1042, LI&A Assoc./J. Cruz Survey, Abstract 2976, 41.3 miles northwest of Laredo, Texas. The well encounters the top of the Wildcat ‘Eagle Ford’ Reservoir at 7,878’ TVD (7,894’ MD) and the base of the reservoir at 8,172’ TVD (8,188’ MD). The discovery well was completed on 9-30-2009 and had an initial 24 hr. rate (on 10-7-09) of 8,092 mcf of gas per day, 28 barrels of condensate per day and 937 barrels of water per day through a 1” choke with 1,070 pounds of flowing tubing pressure. The well produces from a horizontal lateral from 8,515’ to 12,642.5’ measured depth. The Eagle Ford was fracture stimulated with 3,466,700 pounds of proppant and 278,460 barrels of water in 14 stages. (Source: Texas Drilling Observer)

Texas Drilling Observer
(512) 372-9772
P.O. Box 11648
Capitol Station
Austin, TX 78711-1648