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Shell exits Haynesville shale
TEXAS-LOUISIANA
ROYAL Dutch Shell has sold the last of its acre- age in the Haynesville shale, spanning East Texas and northern Louisiana, to Castleton Resources. The buyer, which is jointly owned by Castleton Commodities International (CCI) and Tokyo Gas, announced the closing of the deal on December 30. Concurrent with the transaction, Tokyo Gas will increase its stake in Castleton from 30% to around 46%.
The acquisition consists of around 55,000 net acres (223 square km) with output of over 100,000 cubic feet (2,832 cubic metres). It increases Castleton’s footprint in the Haynesville to roughly 222,400 net acres (900 square km) and raises its output to 334mn cubic feet (9.5mn cubic metres) per day of gas equivalent on a net basis. This is equivalent roughly a 40% increase in Castleton’s scale in the Haynesville.
The companies have not revealed the price at which the acreage was sold.
The deal comes around five years after Shell sold most of its Haynesville position. However, the company – which has been a relatively minor player in US shale compared to US super-majors
ExxonMobil and Chevron – still had some piece- meal remaining acreage.
“This transaction is consistent with our strat- egy of asset aggregation and subsequent cost reduction in the Ark-La-Tex region,” Castleton’s president and CEO, Craig Jarchow, said. “With the help of our partners, we are well positioned to continue building a world-class, and relatively low-decline, portfolio in the Haynesville and Cotton Valley natural gas and liquids plays,” he added.
“We are pleased to complete this important transaction and take yet another step towards becoming a leading gas producer in the region,” Tokyo Gas America’s president and CEO, Jun Tabei, said. “The Gulf Coast, as we have previ- ously stated, is strategically important to Tokyo Gas and we are eager to expand our footprint in the East Texas and Louisiana area through Cas- tleton Resources.”
Tokyo Gas has long-term contracts in place to buy 720,000 tonnes per year (tpy) of LNG from Sempra Energy’s nearby Cameron LNG project on the Louisiana coast.
EOG sells wastewater disposal wells in New Mexico
NEW MEXICO
INDEPENDENT shale producer EOG Resources has sold nearly half of its saltwater disposal wells in the New Mexico side of the Per- mian Basin. The Houston Chronicle reported this week that the company had confirmed the sale of 23 saltwater disposal wells and 300 miles (483km) of oilfield wastewater gathering pipe- lines in south-eastern New Mexico to Oilfield Water Logistics (OWL).
Under the deal, EOG has also entered into a long-term contract with Dallas-based OWL for wastewater disposal services. The financial terms of the transaction have not been disclosed.
OWL announced the transaction on Janu- ary 6, without naming the seller. The Houston Chronicle subsequently reported on January 8 that it was EOG.
According to Texas state records, EOG owned and operated 54 saltwater disposal wells in New Mexico prior to the sale. The company acquired the disposal sites as part of a $2.5bn deal to buy New Mexico-based Yates Petroleum in September 2016.
A number of producers are selling off their wastewater-handling assets to specialist com- panies, which are seeing their businesses grow
as volumes of wastewater in shale basins rise. Many companies are also trying to recycle more wastewater and reuse it for drilling and completion operations, reducing the volumes that need to be disposed of through injection underground.
OWL is one of the companies benefiting from the growth in wastewater volumes. On its web- site, the company says it is an established leader in the Permian Basin and owns and operates the largest commercial produced water gathering system in the northern Delaware sub-basin and Lea County, New Mexico.
“This acquisition complements our current operations in the Northern Delaware Basin, doubling OWL’s footprint and enhancing our capabilities and long-term value proposition for customers,” OWL’s CEO, Chris Cooper, said in a statement. “E&P companies increas- ingly face operational and logistical challenges related to the transportation, re-use and dis- posal of produced water. We are proud to part- ner with North American producers to deliver safe, reliable and sustainable solutions that help our customers to achieve new efficiencies and best practices.”
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