Howard Energy advances Nueva Era pipeline plans
Howard Midstream Energy Partners LLC said its joint venture with Mexico-based service firm Grupo Clisa will move forward with construction plans for the Nueva Era pipeline following a successful open season (OGJ Online, June 24, 2015).
The 200-mile, 30-in. pipeline will connect Howard Energy's existing Webb County hub in South Texas, part of the Eagle Ford shale, directly to Escobedo, Nuevo Leon, Mexico, and to the Mexican National Pipeline System in Monterrey. Howard will manage construction and operations.
Mexico's Comision Federal de Electricidad (CFE) will be the foundation shipper, with an agreement to transport 504 MMcfd of natural gas for a 25-year term to help fuel combined-cycle power plants in Escobedo, near Monterrey.
Howard held a new open season for expansion capacity on Nueva Era to accommodate additional interest received in the initial open season. That open season was scheduled to close Sept. 15.
Already, the joint venture received a presidential permit from the Federal Energy Regulatory Commission that allows for the expansion of Nueva Era up to 1.12 bcfd of capacity.
Subject to meeting all regulatory requirements and finalizing definitive agreements, construction on Nueva Era was expected to begin in early 2016, with an in-service date of June 2017. The potential expansion will not affect the project schedule.
NextEra to acquire Eagle Ford gas lines
NextEra Energy Partners LP, Juno Beach, Fla.,agreed to acquire South Texas natural gas pipelines from privately held NET Midstream for $2.1 billion.
The deal covered seven pipelines that carry gas under ship-or-pay contracts covering a total of 3 bcfd, serving power producers and municipalities in South Texas, processing plants and producers in the Eagle Ford shale, and customers around Houston.
Planned expansions of the three largest pipelines would add 1 bcfd of gas to contracted deliveries. The transaction's terms called for an expansion investment of about $300 million for 2016, NextEra said.
The properties include:
• The NET Mexico Pipeline, a 120-mile, 42 and 48-in. line delivering gas from the Agua Dulce hub west of Corpus Christi to a Pemex subsidiary, which holds a 10% stake, at the Mexican border.
• Eagle Ford Midstream, 158 miles of large-diameter pipeline in the Eagle Ford play with deliveries to the Agua Dulce hub and access to multiple pipeline interconnects.
• The Monument Pipeline, 156 miles of 16-in. line carrying gas from the Katy hub to city gates of Houston and to the Houston Ship Channel and Galveston County.
• Four smaller pipelines serving power plants and residential customers.
NET Midstream is owned 50% by founders Jerry Dearing and Joe Gutierrez and 50% by an affiliate of ArcLight Capital Partners LLC.
Chesapeake runs 3 rigs in Eagle Ford shale
Chesapeake Energy Corp. said its second-quarter operated rig count for the South Texas Eagle Ford was 6, down from 20 rigs running 1 year ago, and the company plans to maintain 3 operated rigs for the rest of 2015.
The independent's Eagle Ford net production averaged 105,000 boed during the second quarter, a decrease of 7%, which executives attributed to more than 60 days of downtime in gathering and treatment facility during May and June. Repairs were made, and the facility was in service on July 1.
Chesapeake executives say they continue to realize significant cost reductions on both a drilling capital per-foot basis and on a completion capital per-foot basis.
But overall Eagle Ford completed well costs are expected to increase because Chesapeake is investing in longer laterals and larger completions. As of early August, it had drilled six wells with more than 9,000-ft laterals. Chesapeake planned to spud its first upper Eagle Ford well in the third quarter.
Lucas sells Karnes County interest to Earthstone
Lucas Energy Inc. of Houston sold 139 net acres of oil and gas assets in Karnes County, Tex., to Earthstone and its affiliate, Oak Valley Resources, for $350,000 in a deal giving Lucas the right to participate up to a specified interest in future operations.
Anthony Schnur, Lucas chief executive officer, said his company is moving forward after having terminated a previous agreement in which Lucas would have merged with Victory Energy Corp. of Austin.
"To that end, we are pursuing opportunities where ready capital is available whether that is rom professional investment funds or potential business combination partners," Schnur said.
Lucas Energy announced a settlement agreement and mutual release with Victory Energy on June 30.