Enterprise Product Partners (EPD) and Chesapeake Energy Corp (CHK): Eagle Ford Shale Update

By Andrea: http://oilshalegas.com

Enterprise Products Partners L.P. (EPD) recently announced that they recently entered into a 10-year agreement with Chesapeake Energy Corp. (CHK) to handle a large portion of their natural gas production in the Eagle Ford Shale:

Chesapeake's gross acreage position currently comprises more than 625,000 acres in and around the oil and natural gas liquids - rich areas of the Eagle Ford Shale across Dimmit, LaSalle, McMullen, Webb, and Zavala counties located in South Texas. The agreements provide Chesapeake with a comprehensive package of midstream natural gas and NGL services, including firm commitments for gas transportation, processing, and NGL transportation and fractionation services.

"We are extremely pleased with our new agreements with Chesapeake, which represent one of the largest single producer commitments to date for Enterprise in the Eagle Ford Shale," said Michael A. Creel, Enterprise's president and chief executive officer. "The deal with Chesapeake marks the fifth major midstream transaction Enterprise has executed with Eagle Ford Shale producers in the past year, reflecting the strategic importance of our integrated and expanding assets serving the various demands of producers in the prolific region."

Enterprise has previously announced long-term commitments with Petrohawk, EOG, Anadarko and Pioneer.

Chesapeake's NGL-rich natural gas will initially be gathered and compressed by Chesapeake affiliate, Chesapeake Midstream Development, LLC, for delivery to a central location. Enterprise will then transport and process the NGL-rich gas at its existing facilities while a previously announced natural gas processing plant that is currently under development in Texas is completed. This cryogenic processing facility, expected to be completed early in 2012, is designed for an initial capacity of 600 million cubic feet per day (MMcf/d) and with an initial capability to extract as many as 75,000 barrels per day (BPD) of NGLs.

The NGL production from Chesapeake's gas will ultimately be transported on Enterprise's previously announced 127-mile NGL pipeline that will extend from the new gas processing plant to Enterprise's NGL fractionation complex in Mont Belvieu, Texas. This new NGL pipeline, also scheduled for completion in early 2012, is expected to have an initial capacity of more than 85,000 BPD and would be readily expandable to over 120,000 BPD.

Activity in the Eagle Ford Shale continues to increase as approximately 115 rigs working in the play have drilled more than 330 wells completed to date. Total current production from the play is estimated at approximately 425 MMcf/d of natural gas and 35,000 BPD of crude oil and condensate.

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Zavala County, Texas: Austin Chalk Update

By Andrea: http://oilshalegas.com

Eagleford Energy Inc. (EFRDE.OB) has been notified by Dawsey Operating, LLC, a Texas based engineering and consulting firm, that the rig allocated to drill an initial test well of the Eagle Ford shale formation will mobilize onto location at the Company's Matthews lease in Zavala County, Texas starting tomorrow. The Company intends to drill vertically through the Eagle Ford and log key formations including the San Miguel sands, the Austin Chalk and the Eagle Ford shale. After logging, the well will be drilled approximately 4,000 feet horizontally through the Eagle Ford shale formation.

The Matthews Lease comprises 2,629 acres of land (or 4 square miles) and is situated adjacent to the Redhawk land block under development by Petrohawk Energy Corporation (HK). Eric Johnson, VP Operations at Dyami Energy LLC, a Texas based subsidiary of Eagleford Energy, stated, "Our primary target is the Eagle Ford shale. Petrohawk has reported 355 barrels a day of oil production from its horizontal well on the property next door. Given the blanket nature of the Eagle Ford formation in this area we are excited by our prospects. We also plan to run tests on the San Miguel formation to gather important petro-physical data on the significant amount of heavy oil in place."

Eagleford Energy's consolidated working interest in the well before payout is 85% (69% working interest after payout).

Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play.

For more shale updates, visit: http://blackberrystocks.blogspot.com

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Zavala County, Texas: Eagle Ford Shale Update

By Andrea: http://oilshalegas.com

Eagleford Energy Inc. (EFRDE.OB) has been notified by Dawsey Operating, LLC, a Texas based engineering and consulting firm, that the rig allocated to drill an initial test well of the Eagle Ford shale formation will mobilize onto location at the Company's Matthews lease in Zavala County, Texas starting tomorrow. The Company intends to drill vertically through the Eagle Ford and log key formations including the San Miguel sands, the Austin Chalk and the Eagle Ford shale. After logging, the well will be drilled approximately 4,000 feet horizontally through the Eagle Ford shale formation.

The Matthews Lease comprises 2,629 acres of land (or 4 square miles) and is situated adjacent to the Redhawk land block under development by Petrohawk Energy Corporation (HK). Eric Johnson, VP Operations at Dyami Energy LLC, a Texas based subsidiary of Eagleford Energy, stated, "Our primary target is the Eagle Ford shale. Petrohawk has reported 355 barrels a day of oil production from its horizontal well on the property next door. Given the blanket nature of the Eagle Ford formation in this area we are excited by our prospects. We also plan to run tests on the San Miguel formation to gather important petro-physical data on the significant amount of heavy oil in place."

Eagleford Energy's consolidated working interest in the well before payout is 85% (69% working interest after payout).

Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play.

For more shale updates, visit: http://blackberrystocks.blogspot.com

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Zavala County, Texas - Eagle Ford Shale Update

By Andrea: http://oilshalegas.com

Eagleford Energy Inc. (EFRDF.OB) released an update today concerning the Eagle Ford shale in Zavala County, Texas:

Eagleford Energy Inc. (EFRDF.OB) announces that it has entered into an agreement to acquire Dyami Energy LLC a Texas limited liability corporation at a transaction value of US$4.1 million. As consideration for the Transaction Eagleford Energy agreed to issue US$3,140,000 of units of the Company at US$0.90 per unit in exchange for 100% of the issued and outstanding membership interests of Dyami Energy and assume US$960,000 of Dyami Energy debt by way of a secured promissory note. Each unit is to be comprised of one common share and one-half a purchase warrant. Each full warrant is exercisable into one additional common share at US$1.00 per share for a period of four years from the date of issuance. The number of Units to be issued is subject to certain working capital adjustments at closing. The Note bears interest at 6% per annum, is secured by the leases and is payable on December 31, 2011 or upon the Company closing a financing or series of financings in excess of US$4,500,000.

The assets of Dyami Energy include a 75% working interest (56.25% net revenue interest after royalties) before payout which reduces to a 61.50% working interest (46.125% net revenue interest after royalties) after payout of $12,500,000 of production in a lease comprising approximately 2,629 gross acres of land in Zavala County, Texas (the "Matthews Lease") and working interests ranging from 90% to 97% (net revenue interests after royalties ranging from 67.5% to 72.75%) in a lease comprising approximately 2,637 gross acres of land in Zavala County, Texas. Eagleford Energy previously announced the acquisition of a 10% working interest (7.5% net revenue interest after royalties) before pay out which reduces to a 7.5% working interest (5.625% net revenue interest after royalties) after payout of $15,000,000 of production in the Matthews Lease.

The Leases are located in Zavala County which is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. Eric Johnson, VP Operations at Dyami Energy stated, "We believe that both the Matthews Lease and the Murphy Lease are highly prospective for hydrocarbons in the Eagle Ford shale formation as well as other formations. The Matthews Lease is surrounded by Petrohawk's (Petrohawk Energy Corporation NYSE: HK) Red Hawk block where Petrohawk has recently announced initial production of 355 barrels a day of oil from a horizontal well drilled on its Mustang Ranch "C" #1H location. The Murphy lease is approximately 11 miles northeast of Chesapeake's (Chesapeake Energy Corporation NYSE: CHK) recently announced initial production of 930 barrels a day from its Traylor North 1-H well." Johnson further stated, "We have logs that show 380 feet of Upper and Lower Eagle Ford shale on our Matthews Lease of which approximately 160 feet is the organically richer lower Eagle Ford. Also, previous engineering reports indicate that the San Miguel formation contains 70 million barrels of heavy oil in the San Miguel D Sands and another 80 million barrels of heavy oil in the San Miguel A,B,C, Sands all within the bounds of our Matthews Lease."
Prior to closing the acquisition, Dyami Energy must satisfy Eagleford Energy that Dyami Energy has either commenced or is prepared to commence operations to drill a test well on the Matthews Lease in compliance with its obligations under the Matthews Lease.

The Transaction is scheduled to be closed by August 31, 2010 subject to satisfaction of all conditions precedent.
At present there are approximately 26.3 million shares issued and outstanding in the capital of the Company prior to the issuance of any shares associated with the closing of the Transaction.

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Zavala County, Texas: Eagle Ford Shale

By Andrea: http://oilshalegas.com

Today I researched the Eagle Ford shale in Zavala County, Texas. The following companies are currently operating in Zavala County:

Petrohawk Energy (HK) currently owns 87,000 net acres in the Eagle Ford shale of Zavala County, Texas. They completed the Ranch C #1H well in 2Q 2010 with a production rate of 350 barrels of oil/day. They plan to spud their third well in Zavala County by the end of 2010.

Crimson Exploration (CXPO) owns a 95% working interest in roughly 4,600 gross acres in southeast Zavala County, Texas. Activity has increased greatly in the Eagle Ford Shale in the oil corridor of the play for Crimson. They are in the process of reviewing the area for potential late 2010 or early 2011 drilling activity.


Chesapeake Energy Corp. (CHK) has increased its acreage position in the Eagle Ford Shale to 550,000 net acres, an increase of 150,000 net acres from the first quarter of 2010. Chesapeake Energy has drilled and completed 7 gross wells to date on its acreage in the Eagle Ford Shale, and estimates that it will operate an average of 5 rigs during 2010. Their most recent well completed in Zavala County, the Traylor North 1H, produced 300,000 cubic feet of natural gas per day and approximately 930 barrels of oil per day.

Doxa Energy currently operates on 1,138 net acres in Zavala County, Texas in the Eagle Ford shale. They plan to spud their first well by Q3 2011.

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Petrohawk Energy (HK): Eagle Ford Shale

By Andrea: http://oilshalegas.com

Petrohawk Energy (HK) announced that they foresee a positive future in their Eagle Ford Shale sector in their 2010 Earnings call:

"Also, we expect to see a meaningful oil production component grow, fueled from new areas of our portfolio. Our growing Black Hawk area in the Eagle Ford Shale and our Red Hawk project, also in Eagle Ford Shale, should provide for this growth. This could bring the oil component of production to approximately 5% by year end and possibly much higher in future years. We will look for these higher-margin oil areas to meaningfully support cash flow growth and organic reserve growth."

The growing company experienced their highest level of operating activity in the Eagle Ford Shale to date. Last quarter, they operated an average of 7.5 rigs and drilled 19 wells, 11 in Hawkville, seven in Black Hawk and one in Red Hawk.

Petroawk Energy (HK) announced their first Eagle Ford Shale play in late 2008. It was founded at a depth of approximately 11,000-12,000 feet. The counties where they currently operate Eagle Ford Shale include LaSalle County, TX, McMullen County, TX and DeWitt County, TX. Prospective counties include Redhawk and Zavala County, TX.

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