4 Jun 2014 More

New Pipeline in the Works for Eagle Ford Shale

posted by Brown Books @ 09:19 0 Comments

Map of the Eagle Ford Shale play in Texas
When Deon Energy said it was going all-in into the Eagle Ford Shale Formation it wasn't kidding. The company invested more than $6 billion the region alone last year, selling off almost that same amount in international assets. Now, Victoria Express Pipeline LLC, or VEX (a subsidiary of Devon), says it is building a 56-mile pipeline  from the Blackhawk central delivery point in DeWitt County, Texas to the inlet of Devon Gas Services’s terminal at the Port of Victoria. The pipeline is expected to come online as early as July 1 of this year. Capacity is estimated at 100 mbopd.

Devon closed a deal late last year to acquire more than 82,000 net acres in the region from GeoSouthern. The deal was worth a reported $6 billion. At that time, the company said its net daily production in the play was 64 mbopd. The company estimates production levels will increase to more than 100 mbopd by next year.

Challenges for the future

As production continues to increase in the region, the company is challenged with the task of getting its product to refining estimations. According to Wood Mackenzie, production in the oil-rich region will increase to 2 mmbopd by the year 2020. That's twice the rate of production of its competitor to the north, the Bakken.

VEX continues its bidding process for commitments to its new pipeline. open season comes to a close on June 29. The company states it will also build  an additional destination point at Point Comfort in Calhoun County, just north of Victoria.

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