First oil
Certain circumstances have caused this editor to have to travel several times during the last month between Houston and the Hill Country of central Texas. This includes traveling the nearly-as-speedy but less-stressful (compared to Interstate 10) “old road” or “back road,” better known as U.S. Highway 90 Alternate, between Houston and Seguin, Texas, before bending northward toward New Braunfels and other portions of the Hill Country.
One of the features of driving along the old road is that for about 20 miles, between the eastern side of Gonzalez and about two miles east of Shiner, the highway intersects a portion of the northeastern Eagle Ford shale. And traveling this route allows one to gauge the relative health of the play in this area.
Casual observation shows that activity is picking up. Whereas up to two years ago, one might see a solitary service truck, or none, recent trips have yielded up to a half-dozen on the road. Similarly, the view on either side of the highway, up to six months ago, was devoid of active rigs, but there were at least two units visibly working in the last month. Just as noticeable are the roustabouts and service personnel working on any given well pad that one would not have seen a year ago. Also, one independent’s field office had been shuttered as recently as the back half of last year, but now several vehicles can be found parked out front on any given day. In addition, an impromptu “man camp” of a half-dozen RVs has sprung up on the side of the road, parked side-by-side. And the fairly large RV park on the east side of Gonzalez, which takes long-term stays, has been visibly busier in the last six months.
These observations may be anecdotal, but they signal better times for the northeastern Eagle Ford, to the relief of the workers and local communities. And EIA numbers confirm this to be true. New-well oil production per rig has gone from 1,448 bpd in May 2017 to 1,479 bpd in May 2018. Oil production in the entire Eagle Ford is up 8.8% from a year earlier, at 1,354 bpd in May 2018. Gas output is up 11.6%, rising to 6.723 Bcfd in May 2018. Also, DUCs have risen 13.6%, to 1,494 in April 2018 vs. a year earlier.
Loco Cuomo. It appears that New York Gov. Andrew Cuomo doesn’t care whether his constituents are suffering with exorbitant power bills, as evidence emerges that New Yorkers are paying 44% more for electricity than the national average, according to the U.S. EIA. This and other data/information are cited in a Consumer Energy Alliance (CEA) report released last month with the title, “Pipelines and their Benefits to New York.” The report also notes that New York’s electricity prices are 26% higher than in neighboring Pennsylvania, and back in January, consumers were briefly forced to pay a record high of $140.25/Mcf because of strong heating demand and insufficient supplies.
Let us not forget that Cuomo hates oil and gas, and led the charge to pass a statewide ban on fracing. And as CEA adds, it is Cuomo who is blocking new gas pipelines from being built into his state from Pennsylvania. The result is insufficient supply and much higher prices. Or, as the Marcellus Drilling News stated, “Without those pipelines, we’re toast. You can’t build windmills and solar farms fast enough to meet the demand for electricity and, by extension, natural gas.”
One more thing from East Canada. As we’ve mentioned in past articles, Newfoundland and Labrador’s Nalcor Energy has been looking to lease the famed Bull Arm fabrication site along Trinity Bay to a firm that would use it for industrial fabrication, supply servicing and marine operations. By March, Nalcor had narrowed the field to just two firms: DFB Driver and Canadian Supply Base Company. Yet no decision had been announced as this issue went to press. Readers may remember that Bull Arm provided much of the fabrication work for East Canada’s first mega-project, Hibernia, as well as ExxonMobil’s recent Hebron development. For more details on East Canada, see page 69. 
