Energen Resources Corp. has purchased three-year leases for about 17,000 net acres in the Bone Spring and Avalon shale trends in the Permian Basin from various Texas state agencies and other entities for $15.3 million, said parent Energen Corp. Based on 320-acre spacing, the company estimates that the acreage in Reeves, Ward, Loving and Winkler counties offers potential for approximately 50 Bone Spring locations and 50 Avalon Shale locations. The typical Bone Spring well has estimated ultimate recovery of 400,000-500,000 boe, the company said. Energen Resources estimates that drilling and completion costs are approximately $7.5 million per well. It has drilled eight Bone Spring wells in Ward and Winkler counties and participated in another 23 wells. The company announced plans in December to drill another 13 Bone Spring net wells in 2011 and at least one Avalon Shale well. Potential drilling plans on the new leases in 2011 have not been determined.
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South Texas Processing ‘Super System’ In the Works
Southern Union Co.’s Trunkline Gas Co. has signed a precedent agreement with DCP Midstream LLC to provide long-term, firm transportation service for liquids-rich gas. DCP Midstream will be the anchor shipper on a modified portion of the Trunkline system in South Texas focusing on Eagle Ford Shale production.
Industry Briefs
Midland, TX-based Legacy Reserves LP, which focuses its exploration and production in the Permian Basin and in the Midcontinent, has ended discussions with Apollo Management VII LP to take the company private. The Legacy board of directors’ conflicts committee said it was unable to reach an agreement with Apollo and that it would be in the best interests of its unitholders to remain a publicly held partnership. To improve its liquidity position and mitigate the risk of falling commodity prices, Legacy, which was formed in 1993, also has entered into new oil and natural gas commodity swaps.
TEPPCO Offering Capacity on Permian NGL Line Expansion
TEPPCO Partners LP affiliate Chaparral Pipeline Co. LLC is holding a binding open season for a proposed expansion of its 845-mile natural gas liquids (NGL) pipeline originating in the Permian Basin of West Texas and eastern New Mexico.
Loews, XTO Grab Most of Dominion’s Onshore E&P for $6.5B
Dominion on Monday announced the sale of nearly all of its U.S. onshore exploration and production (E&P) properties in a two-way deal that will send its Permian Basin, Antrim Shale and Black Warrior Basin operations to Loews Corp. for $4.025 billion and its Rocky Mountain, Gulf Coast, San Juan Basin and South Louisiana assets to XTO Energy for $2.5 billion. Together, the operations held 3.51 Tcfe of proved reserves at year-end 2006.
Apache Touts E&P, Says Canadian Gas Shale Has Potential
Successful exploration in the United States and the addition of some Permian Basin prospects pushed Apache Corp. to gains in its quarterly natural gas and oil production worldwide, which grew 14% from a year ago and 7% from the first three months of 2007. Service costs also moved lower, which should help to bump up Canadian exploration through the rest of the year.
Loews, XTO Grab Most of Dominion’s Onshore E&P for $6.5B
Dominion last week sold nearly all of its U.S. onshore exploration and production (E&P) properties in a two-way deal that will send its Permian Basin, Antrim Shale and Black Warrior Basin operations to Loews Corp. for $4.025 billion and its Rocky Mountain, Gulf Coast, San Juan Basin and South Louisiana assets to XTO Energy for $2.5 billion. Together, the operations held 3.51 Tcfe of proved reserves at year-end 2006.
Southern Union Sells PA LDC, Moves to Houston, Furthers Pipeline, Midstream Role
The Sid Richardson purchase includes 4,000 miles of natural gas and gas liquids pipe in the Permian Basin in West Texas and New Mexico, about 450 MMcf/d of cryogenic processing capacity among six interconnected plants, 930 MMcf/d of high-pressure treating capacity and a gas liquids and gas marketing operation based in Houston and Fort Worth.
Keystone Holding Open Season for 1 Bcf of Storage
The Keystone facility, located in the Permian Basin near the Waha hub, is conducting a non-binding open season through Sept. 1 to secure interest in firm natural gas storage services for 1 Bcf of capacity, according to Unocal Midstream & Trade (UMT). Its fourth cavern is expected to be in service by the end of this year.
Keystone Holding Open Season for 1 Bcf of Storage
The Keystone facility, located in the Permian Basin near the Waha hub, is conducting a non-binding open season through Sept. 1 to secure interest in firm natural gas storage services for 1 Bcf of capacity, according to Unocal Midstream & Trade (UMT). Its fourth cavern is expected to be in service by the end of this year.