It’s 9/24 @about 8:45 and I just got back from the pecan farm. It was like going to the drive in movie with people watching from outside the fence.
Two questions: (1) I had originally heard through FSNN that someone to the north of the well would be be providing water. So now the pipe is running through the road ditch and turning into the pecan farm gate. No pipes running south or west. (2) It was pretty dark but no sign of a pipeline yet. Could it be going north to the pipeline to the Bigham well? Seems to be about the same distance. I didn’t look because it was too dark by then.
Yesterday the water line was on, it goes from the north of the pad area (probably a small pond back there) to the entrance and heads east along CR 226 and turns north into the pecan farm going towards the house…you can see a large pump back there…so I guess they are getting water from that location. The big pipe with the water for the frac will be coming from the south off the 82 acre tract on CR 240…it will run along side the roads I had mentioned in a previous post and then run through the fields on the unit itself.
For the Blackshear and Parr wells they got the water from a small tank on the Steffek property…they piped it to a small pond they made by the rig.
As far as the gas pipeline it is being worked on at the northern part of the pad. It runs to the east…north of the pecan farm property line then it crosses CR 225 about 1/4 mile north of the CR225/226 intersection. The pipeline will then go south to St’Johns road crosses it and then runs due east. The pipeline has to go under US 77 to the main pipeline just on the other side. If you go during the daytime you will see all it marked with white and red stakes. Yes, no work on it yet on the pastures, but once they start on it, if they have the amount of workers they had on the “Black Sheer Pipeline” different than the Blackshear unit, they could finish it in a matter of weeks as far as construction…and another couple weeks to run the test. Since the original plan was to drill these back to back and then frac back to back, the pipeline would not be needed until around 12/1.
I hate to disappoint about nat gas prices but the forwards (futures) do not top $5. This country has an abundant amount of gas reserves just waiting to be drilled or produced. The future demand is very bullish with both AI and LNG exports but the gas plays in the Permian, Marcellus/Utica, Haynesville, SCOOP/STACK and Bakken prevents a sustained price increase. As gas prices hit $4-$5 producers will stick their straws in the ground keeping a lid on the price.
Thanks for satisfying my curiosity. Drilling back to back would indicate that 1205 is a walking rig and will just be moved over when the first hole is finished I guess. They sure seemed to be drilling last night.
Probably means nothing but I made the LONG drive to Midland last weekend and every flare seems to be running full on. Unsure if that means too much gas is being produced for the takeaway facilities or if there was a problem somewhere down the line.
You drive by Energy Transfer’s (NYSE: ET) Garden City Terminal just east of Midland and they had the most impressive flare I’ve ever seen. Get that price up there!
Yes, Nat gas prices all over the place….yesterday at $2.80, but 2/25 was at $4, 5/22 was $8. I don’t think anyone thinks nat gas would stay much higher for a prolong period of time…maybe 12 months. It takes a while for producers to drill and ramp up, and then if they know prices will just go down, like below $2 in 2/24 they might not act.
This pricing calculation will be in the mix when EOG decides to go north of the Pecan farm site, of course the major factor is production in those units….and with these prices production will have to be high and consistent…with a good amount of oil production to help cover the inital cost. Right now oil production on those units is not expected to be anything special…like the Finn unit wells south of shiner. So, the gas production would have to be better than blackshear which in july went down to 2.2 million /day, and after transport cost and royalty cost EOG only made $66,000 for the entire month in gas…the oil production is what is making this well profitable.
IMO if the futures are wrong and do not hit $5 or more in 2026 or 2027 then some of these tracts will not be drilled out. EOG just recently acquired Encino in the Utica 675,000 acres…more than doubling their total acreage. this play has enormous gas reserves with extremely high daily production per well. EOG will easily utilize this play (putting their CAPEX dollars there) if our area does not come in as planned. So everyone wanting new wells in our area should be hoping for the best….
Generally speaking, the Permian isn’t drilled for gas production. It is associated gas that companies have to flow in order to produce the oil. Before flaring became more strict, it was better to flare the gas than to sell it for a loss. However, since then, there have been a lot more pipelines built/announced offering more capacity to take the gas from the Permian to the Gulf Coast. That has allowed operators to have gas takeaway and not sell at a loss for the most part.
Gas flaring has significantly been reduced over the past few years - in part to flaring regulations and in part due to the several major gas pipelines that are bringing Permian gas to the Gulf Coast. These lines are taking on the average about 2 BCF per day from the Permian. Produced gas is often run thru processing plants to strip out the NGL’s and only leaving the raw residue gas behind
The problem with these huge plays like the Permian and Marcellus is too much supply and not enough takeaway. This results in the Permian going negative sometimes where the producer will pay a shippper to move his gas. As was previously said it is associated gas and only a byproduct of oil so it’s not as painful. Producers in the Marcellus will shut their wells down if prices get too low since it is a gas only play.
The good news is gas demand is expected to soar especially around 2028. LNG feed gas is around 15 Bcf/d right now and 27/28 it’s expected to be at 24 Bcf/d. Also there are a lot of new gas-fired generation that is planned for 2028-30 which are replacing coal fired generation. Also don’t forget about AI demands. I don’t think the producers will be slowing down because of all the future demand in the works.
PS comment on Permian production - although much of the gas is associated with oil wells, parts of the Delaware Basin (e.g. southern Reeves Co and Culbertson Co) are “gas” areas where that product dominates. Pipeline takeaway capacity plus gas prices have had a negative impact on new drilling in this part of the basin
Permian Highway and other similar mega volume pipelines have one thing in common- they are transmission lines bring gas from West Texas to the coast. Not set up to take new gas from along their pathway.
Separate gas lines will be needed for produced gas from this “new” trend
It sounds like the gathering gas lines EOG are installing will connect to the P66 gas pipeline running perpendicular to 77. Does anybody know how they will move the oil out? Are there any oil pipelines in the area they could connect to?
They are supposed to get water for the fracking from my tank across 226. That water line will come from the south across Rocky Creek to my tank and then to the Monster Unit. Thanks to everyone contributing on this forum. It is very informative for me!
The water line coming from the south to your tank will travel a couple of miles from the 82 acre tract off of CR 240 with the mega reservoir on it…right now there is a line from the reservoir going to the Parr unit.
As far as what I heard, or haven’t heard there are no plans right now to have an oil pipeline for the Redhawk properties….possibly the EOG units to the south based on oil volumes…right now all the EOG & Redhawk units in our area are being serviced by trucks. i think the trucks hold 150 barrels…so not that many trucks per day….maybe more for water…
Analyst: “we will never have enough gas to supply all these things. Pricing will be continually high for the foreseeable future because aging assets, Europe/russia, LNG, AI, etc. These guys can’t put so much gas online that they tank the market AGAIN.”