Vancouver-based Terrace Energy Corp. has reached an agreement to acquire and develop acreage in Zavalla and Dimmit counties in South Texas in an area that has seen “highly successful” discovery wells in the emerging Buda Limestone formation. Terrace struck a farm-in agreement for a 75% working interest (WI) in several leases that cover 10,000 gross (6,700 net) acres. The company has the opportunity to drill a series of earning wells to test the Buda formation. Each well will secure a 75% WI and a 56.25% net revenue interest in a 640 acre production unit. The company has the option to secure additional production units by drilling additional earning wells each within 120 days from the completion date of the previous earning well. Each production unit may contain up to seven additional drilling locations. The project acreage is in the core of the Eagle Ford trend and is near a number of prolific horizontal wells drilled into the naturally fractured Buda Limestone, Terrace said. “We believe the Buda Limestone formation, which is also present on our Maverick County Project, is highly prospective and will be a core focus for our company as we implement our growth model in South Texas,” said CEO Dave Gibbs.
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Challenges Mounted, Curtailed Growth at Magnum Hunter Last Year
Magnum Hunter Resources Corp.’s progress in both the Appalachian and Williston basins plodded along in 2013, set back by inclement weather late in the year, processing issues in Appalachia and an increase in labor and operating costs in North Dakota.
Domestic Oilfield Spending Faster, More Furious, Says Raymond James
U.S. oilfield spending and activity this year is “fast-er and furious-er” than predicted by analysts at Raymond James & Associates Inc., with exploration and production (E&P) cash flows now forecast to be 30%-plus more than in 2013.
Industry Brief
A Halliburton Co. subsidiary will pay $1.8 million in state fines for violating Pennsylvania’s Solid Waste Management Act, but it will not face criminal charges as some had called for in 2012, according to the Pennsylvania Attorney General’soffice. Halliburton Energy Services signed an agreement saying it would pay the Pennsylvania Department of Environmental Protection’s (DEP) fine and not appeal the agency’s findings (see Shale Daily, Feb. 20). The DEP cited Halliburton for committing 255 violations related to the treatment, storage and disposal of drilling waste at its facility in Indiana County, PA. The DEP asked the attorney general’s office to conduct a criminal investigation last year, but a spokesman for Attorney General Kathleen Kane said the office’s review showed no cause for such action. No further explanation was offered. Environmental groups had also pushed for a criminal investigation. The attorney general’s latest decision marks the second time the office has decided not to pursue criminal charges since the DEP learned of the violations in 2011.
Midwest Paces Broad Gains Again; Futures Spike 18% Week-to-Week
Physical natural gas for weekend and Monday delivery continued to forge higher in Friday’s trading. Points with connectivity to the Dawn Hub in western Ontario showed double-digit dollar gains and gains of 50 cents to $1 or more were common elsewhere. A couple of Marcellus points in the Northeast showed declines.
Cash Sees Volatile Weekly Performance; Futures Spike 18%
Wide variations in natural gas pricing marked the week ended Feb. 21 as multi-dollar gains in the Midwest and Midcontinent along with a five-year high reached by the March futures offset large dollar losses in the East and smaller declines nearly everywhere else.
Industry Briefs
The natural gas pipeline partnership of Williams has agreed to buy the company’s Canada operations in Alberta for $1.2 billion. The assets include an oilsands off-gas processing plant near Fort McMurray, 260 miles of natural gas liquids (NGL) and olefins pipelines, and a NGL/olefins fractionation facility at Redwater. Williams Partners LP also is buying an expansion project underway at the Redwater facility. The operating results are expected to contribute distributable cash flow to the partnership of $135-160 million during the remaining 10 months of 2014, and $200-240 million in 2015. Williams owns 64% of the partnership.
Industry Brief
The Pennsylvania Department of Environmental Protection (DEP) has fined a subsidiary of Halliburton Co. $1.8 million for 255 violations of the state’s Solid Waste Management Act between 1999 and 2011. The DEP on Tuesday said Halliburton had waived its right to appeal and signed a consent agreement for the fine against subsidiary Halliburton Energy Services. DEP became aware of the violations in 2011 during an inspection of a Homer City facility in Indiana County, PA. Inspectors discovered that Halliburton had stored, treated and transported hydrochloric acid waste without obtaining proper DEP permits. A further investigation revealed that the company had committed the violation on multiple occasions to 1999. DEP said between 1999 and 2011 Halliburton transported acidic waste that originated at well sites without identifying the waste as “hazardous,” without the proper trucking permits and without using a licensed hazardous waste transporter. Additionally, the company sent the waste to an unauthorized treatment and disposal operation. The DEP said no evidence suggests the waste handling caused any harm to the public or environment.
Cimarex on ‘Glide Path’ to Maintain Delaware Basin Leasehold
Cimarex Energy Co. executives said the company has completed two wells targeting the Wolfcamp Shale of the Permian Basin with 10,000-foot laterals and plans to drill three more at that length as it looks to continue testing and lock up the majority of its leases by 2017.
Citizens Group Looking to Enact Frack Ban in Denton, TX
A newly formed group of citizens in Denton, TX, which sits the northern edge of the Barnett Shale, said Tuesday it is gathering signatures for a ballot initiative that basically would ban unconventional drilling by banning new wells from performing hydraulic fracturing (fracking) within the city limits.
