OXY investing $2.6B into Permian Basin
Reposted with permission from the Hobbs News Sun.PERMIAN BASIN PETROLEUM ASSOCIATION MAGAZINE
Houston-based Occidental Petroleum said Aug. 8 it has agreed to sell certain non-core domestic midstream assets for $2.6 billion to invest in its “high-return Permian assets.” Vicki Hollub, president and CEO, said, “Our world-class assets, combined with top-performing wells and takeaway capacity, afford us the unique opportunity to enhance our leadership position in the Permian Basin.”
Assets in the sale include the Centurion common carrier oil pipeline and storage system from southeast New Mexico to Cushing, Okla., an oil gathering system in southeast New Mexico and the Ingleside crude terminal. The Midland Reporter Telegram said Sugar Land-based Lotus Midstream is acquiring Centurion, and Houston-based Moda Midstream is acquiring Oxy’s Ingleside Energy Center.
Forty Acres begins waterflood development in Lea County
Houston-based Forty Acres Energy said Aug. 3 it has started to develop its West Eumont unit waterflood in the Permian Basin. West Eumont is a Yates, Seven Rivers and Queen waterflood unit of 7,977 acres in Lea County. Forty Acres said it began injection operations and officially launched development in July. The company said it also acquired existing water-handling infrastructure in the unit and entered into a third-party agreement to secure water supply for its injection needs.
Permian Basin count reaches 2018 high of 486 drilling rigs
Rig count in the Permian Basin edged up to a 2018 high of 486 oil and gas drilling rigs as of Aug. 17, according to the latest report from Baker Hughes. That’s a gain of 1 rig in the last week and 109 rigs in the last year. In the past week, Texas added 3 rigs to reach 525 (459 a year ago), New Mexico lost 3 from its 2018 high of 107 to fall to 104 rigs (62 a year ago), and the U.S. was unchanged at 1,057 rigs (946 a year ago).
Reeves County reached another all-time high with 79 active drilling rigs to lead the U.S. followed in the Permian Basin by Midland County with 58, Lea County with 53 and Eddy County with 47. The Pecos Enterprise said Reeves’ rig count had declined to a low of 17 rigs during the 2014-16 industry downturn.
Other leading states as of Aug. 17 included runner-up Oklahoma with 140 rigs (139 last week, 131 last year), Louisiana in fourth with 61 rigs (59 last week, 65 last year) and North Dakota with 56 rigs (56 last week, 51 last year). Other leading regions as of Aug. 17 were Eagle Ford with 79 rigs (79 last week, 75 last year), Cana Woodford with 65 rigs (68 last week, 67 last year), Williston with 56 rigs (56 last week, 51 last year), Marcellus with 53 rigs (52 last weeek, 46 last year) and Haynesville with 48 rigs (49 last week, 45 last year).
Oil exports from Texas ports exceed imports for first time, DOE says
Data from the U.S. Department of Energy show that oil exports exceeded imports along the Texas Gulf Coast for the first time on record in April. The Houston Chronicle said exports in the Houston-Galveston port district, which includes Corpus Christi, exceeded imports by 15,000 barrels per day in April, and the difference grew in May to 470,000 barrels per day. In May total U.S. crude oil exports grew to a record 2 million b/d. The Department of Energy said on average since mid-2017 exports from the Houston-Galveston port district accounted for about half of the U.S. total, and in May that percentage grew to 70 percent.
Plains, Magellan to sell 50 percent interest in BridgeTex pipeline
Houston-based Plains All American Pipeline and Tulsa-based Magellan Midstream Partners said this week they have agreed to sell a combined 50 percent interest in BridgeTex pipeline for $1.438 billion to Canadian pension fund OMERS Infrastructure Management. OMERS will acquire 30 percent from Plains and 20 percent from Magellan. Tuesday’s announcement said Magellan will continue to operate the pipeline, a crude oil system of 400,000 barrels per day that extends from Colorado City in west Texas to Houston. It is scheduled to be expanded in 2019 to 440,000 b/d. Michael Ryder of OMERS said, “The addition of BridgeTex marks our re-entry into the U.S. midstream sector and is a welcome addition to our high-quality infrastructure portfolio.”
Carrizo acquires Reeves, Ward properties from Devon for $215 million
Houston-based Carrizo Oil & Gas said Aug. 14 it will purchase certain properties in the Delaware Basin from Devon Energy Group for $215 million. The deal includes 10,600 gross acres (9,600 net, 90 percent operated) in Reeves and Ward counties (94 percent held by production). A majority of the position is adjacent to Carrizo’s existing acreage. Carrizo said net production is 2,500 boed (60 percent oil) with more than 100 net potential derisked drilling locations in Wolfcamp A and B. After the sale, Carrizo will hold about 26,300 net acres in its Phantom area and 46,000 net acres in the Delaware Basin.
S.P. (Chip) Johnson, president and CEO, said, “We expect to seemlessly integrate these assets into our existing development plan for the area, which currently assumes a ramp-up in activity in the second half of 2019 as Permian pipeline takeaway is forecast to increase.”
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