New gas pipline will ship 2 bcfd into Mexico

NET Midstream and ArcLight Capital Partners have secured financing for the construction of a gas pipeline to transport 2 bcfd of natural gas into Mexico from the Texas Gulf Coast.

The Agua Dulce Pipeline will link into nine interconnections at the Agua Dulce hub south of Corpus Christi, Tex., and transport gas 120 miles south to the US-Mexico border. There, it will connect with Phase One of the Los Ramones Pipeline being developed by an affiliate of Gasoductos de Chihuahua S. de R.L. de C.V.

MGI Supply Ltd., a subsidiary of Pemex Gas y Petroquimica Basica (Pemex Gas), has agreed to purchase pipeline capacity pursuant to a long term firm gas transportation agreement. The line is expected to be operational in late 2014.

Construction of the pipeline will be funded by a $665 million facility secured by Milbank, Tweed, Hadley & McCloy LLP.

Milbank project finance partner Dan Michalchuk said Agua Dulce exemplifies the changing face of US energy infrastructure. "The boom in domestic shale production is projected to turn America into a net energy exporter in coming years. This project reflects that trend and should be a key source of expanding delivery of US natural gas into Mexico, which has huge energy needs."

Comstock budget calls for 71 oil wells in 2014

The 2014 drilling program of Comstock Resources Inc. calls for developing the company's acreage in the South Texas Eagle Ford shale, delineating acreage prospective for the Eagle Ford in East Texas, and drilling two wells in the Tuscaloosa Marine shale.

The company plans to utilize five rigs to drill 71 (47.6 net) oil wells and no gas wells in 2014. The budget includes $264 million to fund the drilling of 59 (40.2 net) wells in the South Texas Eagle Ford shale; $50 million for the drilling of 10 (5.6 net) wells in the East Texas Eagle Ford shale; $27 million for the drilling of two (1.8 net) wells in the emerging Tuscaloosa Marine shale in Louisiana and Mississippi, and $29 million will be spent on facilities, recompletions, and other capital projects. The remaining $80 million will fund the completion of 29 South Texas Eagle Ford shale wells that were drilled but not completed in 2013.

The drilling program is expected to help Comstock raise its oil production to a range of 4.1-4.6 million bbl in 2014, a year-over-year increase of 75-95%. Comstock, meanwhile, plans no new gas wells during the year and expects its natural gas production will decline to a range of 40-44 bcf. If natural gas prices improve in 2014, the company said it will consider restarting its gas-focused drilling program in the Haynesville and Bossier shales in North Louisiana.

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