Barnett Shale

Barnett rig count rises to 46

Active drilling rigsIn the Barnett Shale rose to 46, up three from a week ago, according to RigData. Wise County led with 11 rigs, following by Jack with eight, Montague with six and Tarrant with four. The U.S. rig count was down four to 1,894 even as rigs seeking crude oil rose by 11 to 1,419, according to Baker Hughes Inc. Rigs seeking natural gas dropped 13 to 473 and geothermal rigs fell from four to two.
— Jim Fuquay

Chesapeake sued over Barnett lease provision

Beaumont personal injury attorney Walter Umphrey is representing two Houston energy companies who say they should have been accorded the same chance to invest in the wells Chesapeake Energy drilled on their leases as Chesapeake CEO Aubrey McClendon. McClendon for years had the right to buy a small stake in every Chesapeake well, and according to a report by Bloomberg News, Chesapeake "was contractually obligated to offer the leaseholders a similar chance to profit in wells it developed across a 10,900-acre swath described as the “sweet spot” of the Barnett Shale." The filing says Chesapeake has 115 wells on the leases and plans 100 more. The plaintiffs also claim Chesapeake of "consistently underpaying proceeds due under their leases" and "refusing to correct errors favoring the company."

The Bloomberg story is here.

-- Jim Fuquay

Fracturing chemicals for many wells unreported

Bloomberg News has a new report that says about 40 percent of new wells drilled do not show up in the FracFocus.org disclosure website operated by state regulators. Bloomberg's analysis showed that reporting was particularly incomplete in Texas, where nearly 60 percent of wells drilled in 2011 after April 11, when FracFocus started operation, don't show up in the disclosure site. "Texas began mandating disclosure of fracking chemicals this year, after officials determined that operators were voluntarily reporting about half their fracked wells to FracFocus, according to the Texas Railroad Commission, which regulates oil and gas wells," Bloomberg said. 

The full story is here.

-- Jim Fuquay 

An overview of U.S. shale plays

Powell Shale Digest has a one-page summary of production and well data for nine major U.S. natural gas and crude oil shale regions. It shows nearly 36,000 wells, with total production of nearly 23 trillion cubic feet of gas and 682 million barrels of oil and condensate from the Barnett, Fayetteville, Eagle Ford shales, and multiple areas of the Haynesville, Bakken and Marcellus shales. The data is free and the link is here.

(Editor's note: An earlier version of this post used a figure of "nearly 40,000 wells" from the original Powell Shale Digest report. The authors of that report later corrected the number.)

-- Jim Fuquay

Barnett rig count rebounds from low

Active drilling rigs in the Barnett Shale rose to 48, up seven from last week's longtime low of 41, according to RigData. The Barnett continued to get a boost, if you can call it that, from producers focusing on areas high in liquids like crude oil or natural gas liquids, such as Wise and Montague counties (nine rigs each) and Jack (eight rigs. Tarrant County, a dry gas area that led drilling since about 2008, was surpassed earlier this year as the busiest county in the Barnett and now stands at seven rigs.

The U.S. rig count rose by one this week to 1,931, helped by a record 1,432 rigs seeking oil, said Baker Hughes Inc. Rigs seeking gas dipped to 495, with four listed as miscellaneous. A year ago, Baker Hughes listed 1,959 rigs.

-- Jim Fuquay

 

Texas gasoline prices up 13 cents in past week, AAA says

 

Higher crude oil and ethanol prices have helped push the average price of a gallon of regular unleaded gasoline in Texas up by 13 cents, to $3.49, says auto club AAA.

Drivers in Fort Worth-Arlington and also Dallas are paying the most, $3.52, and motorists in El Paso are paying the least at $3.21.

"The average in the Lone Star State is 17 cents less than the national gas price average of $3.66 a gallon," AAA said Thursday.

"The higher pump prices are due to rising global crude oil prices, much more expensive domestic ethanol as a result of the current Midwestern drought and an increase in demand due to the summer driving season," it said.

 

“Right now Texans are paying about $49 to fill up a typical vehicle’s 14-gallon tank,” said AAA Texas/New Mexico public affairs representative Doug Shupe. “Some analysts say drivers will likely face higher pump prices in the weeks ahead until the summer draws to a close. Price decreases may resume in the fall when summer travel ends.”

 

-- Jim Fuquay

Chesapeake drilling plans in Barnett Shale unchanged

Chesapeake Energy's earnings conference call Tuesday included an update on its drilling plans, which call for cutting the number of rigs dedicated to dry natural gas from 47 to eight by 2013, but the trimming will happen outside the Barnett Shale. The Star-Telegram reported in May that the Oklahoma-based producer was reducing its active rigs in the Barnett from a dozen at the start of 2012 to just two by summer. Julie Wilson, Chesapeake's top officer in the field, said Wednesday that the company will stick with two rigs in the Barnett "for the foreseeable future." The Houston Chronicle's FuelFix blog has a report on Tuesday's conference call here.

-- Jim Fuquay 

UT study links some disposal wells to small earthquakes

Another study, this one at the University of Texas at Austin, says small earthquakes appear to be associated with some high-volume wastewater disposal wells, but not all of them. Using seismographs placed around the Barnett Shale, the study by Cliff Frohlich at UT's Institute for Geophysics also found many more small quakes than previously reported, suggesting the phenomenon is more common than supposed. The UT report echos a similar report by the National Research Council in June that also linked seismic activity with high-volume injection wells. Frohlich found that quakes occurred near nine of 27 high-volume disposal wells he studied in Johnson County, while there were few quakes near similar wells in Wise County. "A plausible hypothesis to explain these observations is that injection only triggers earthquakes if injected fluids reach and relieve friction on a suitably oriented, nearby fault that is experiencing regional tectonic stress," Frohlich wrote, adding that the theory would need more study to be proved. The Star-Telegram's report is here.

-- Jim Fuquay

Quicksilver impairments produce big second-quarter loss

With lower production and lower product prices, Fort Worth-based Quicksilver Resources wasn't going to have favorable second-quarter earnings to report Tuesday. But it also threw nearly $1 billion in writedowns on assets into the mix, for a net loss of $673 million, or $3.96 a share. After adjustments for one-time items, Quicksilver lost $21 million, or 13 cents a share. Wall Street analysts were expecting a loss of 6 cents a share, but the company's shares were up 5 percent in early trading. Quicksilver said it trimmed planned capital spending for the year's second half by $50 million and made changes to a credit agreement.

-- Jim Fuquay