August 18, 2014
July 30, 2014
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Areas of Operation
The Mid-Continent region consists of operated and non-operated properties in the Golden Trend field, Cana Shale play, Verden field, and other fields located in the Anadarko Basin of western Oklahoma; the Mansfield field and other fields in the Arkoma Basin of Arkansas and Oklahoma; and various fields in the Texas Panhandle. Within the Mid-Continent region, our assets can generally be characterized as mature fields that produce from multiple reservoirs. Productive depths range from approximately 2,500 feet in the Arkoma fields of western Arkansas to greater than 18,000 feet in the Springer formation in certain western Oklahoma fields.
Our largest producing field in the region is the Golden Trend field, which extends across Grady, McClain and Garvin Counties in Oklahoma. The field is a large structural trap, discovered in 1947, that produces from the shallow Pennsylvanian Deese formation to the deep Ordovician Arbuckle formation. Most of our current production is from the Bromide formation and the "Big Four" interval consisting of the Viola, Hunton, Woodford and Sycamore formations. We typically drill through all these formations and perform multi-stage fracture stimulation completions in the Bromides and "Big Four" intervals.
We have a significant ownership position in the new and expanding Cana (Woodford) Shale and Southeast Cana Shale plays in western Oklahoma. We have approximately 17,427 net acres in these plays extending across Canadian, Blaine, Dewey, Grady, Garvin, McClain and Stephens Counties in Oklahoma. The Cana and Southeast Cana Shale produce from horizontal wells drilled to vertical depths of 11,000 to 15,500 feet and extended with horizontal lateral lengths of approximately 5,000 to 10,000 feet. The horizontal laterals are fracture stimulated in multiple stages to optimize production from the shale reservoir.
In the Mid-Continent region, we operate 299 productive wells and own a working interest in an additional 1,044 non-operated productive wells. The average working interest in these productive operated and non-operated wells is 83% and 9%, respectively. The net production averaged approximately 46.9 MMcfe/d in the year ended 2013, of which approximately 73% was produced from wells we operated. Most of the non-operated production comes from the properties within the Cana Shale play, Verden field, and various other fields located in the Arkoma and Anadarko Basin. The majority of the interests in the Cana Shale and Southeast Cana Shale are operated by large upstream companies with significant experience and expertise in developing shale gas reserves.
The South Alabama region includes the Big Escambia Creek, Flomaton and Fanny Church fields located in Escambia County, Alabama. These fields produce from either the Smackover or Norphlet formations at depths ranging from approximately 15,000 to 16,000 feet. The Big Escambia Creek field was discovered in 1971 and encompasses approximately 11,568 gross (7,436 net) Eagle Rock operated acres. We operate eighteen productive wells with an average ownership of 63% working interest and 54% net revenue interest in the Big Escambia Creek field.
The Fanny Church field is located two miles east of Big Escambia Creek. Our ownership includes approximately 1,123 gross (839 net) operated acres that include three productive operated wells with an ownership of 80% working interest and 62% net revenue interest.
The Flomaton field is adjacent to and partially underlies the Big Escambia Creek field. The field encompasses approximately 2,570 gross (2,252 net) Eagle Rock operated acres and produces from the Norphlet formation at depths from approximately 15,000 to 16,000 feet. We operate three productive wells with an approximate average 91% working interest and 78% net revenue interest.
The Smackover and Norphlet reservoirs are sour gas condensate reservoirs which produce gas and fluids containing a high percentage of hydrogen sulfide and carbon dioxide. These impurities are extracted at the Eagle Rock-operated Big Escambia Creek Treating Facility or the Flomaton Treating Facility, and the effluent gas is further processed for the removal of natural gas liquids in our Big Escambia Creek Gas Processing Facility. During 2013, the Flomaton facility sulfur recovery unit was shut down due to equipment failure. The untreated Flomaton facility gas was re-routed to the Big Escambia Creek facility for treating and processing, while continuing to stabilize and sell the Flomaton and Fanny Church condensate at the Flomaton facility. The operation of the wells and the facilities is closely connected, and we are the largest owner and operator of the combined assets. In addition to selling condensate, natural gas, and NGLs, we also market elemental sulfur.
The Permian region contains numerous fields, including Ward South and Ward-Estes North located mainly in Ward, Pecos, and Crane Counties, Texas. These fields are located on the Central Basin Platform, which extends from central Lea County in New Mexico to central Pecos County in Texas and encompasses hundreds of fields with multiple productive intervals from the Yates-Seven Rivers-Queen group through the Ellenburger formations. In Ward County, we have approximately 10,285 gross (10,215 net) acres of leasehold, and we operate fields with multiple productive horizons, which produce from depths of 2,300 feet (Yates) to 9,100 feet (Pennsylvanian). Two of our major properties in the region, the Louis Richter lease and the American National Life lease, are located in Ward County. In Crane County, the Southern Unit is located in the Running “W” Waddell field, which was discovered in the mid-1930s and produces predominantly oil at depths from approximately 5,750 to 5,900 feet. We operate 192 productive wells and own an interest in another 53 non-operated productive wells across approximately 5,875 net acres in this area. Our ownership in the Permian region operated wells averages 95% net working interest and 76% net revenue interest.
East Texas/South Texas/Mississippi/Louisiana
In East Texas, Mississippi and Louisiana, we operate 34 productive wells and own a non-operated interest in an additional 102 wells. The average working interest in these productive operated and non-operated wells is 84% and 3%, respectively. The East Texas fields produce primarily from the Smackover Trend at depths from 12,000 to 12,700 feet and encompass approximately 18,991 gross (15,872 net) Eagle Rock acres. We operate 32 productive wells which produce gas that contains between approximately 25% to 65% of impurities (hydrogen sulfide, nitrogen, and carbon dioxide). The Edgewood field contains two productive gas wells in the Cotton Valley at depths of 11,500 to 11,600 feet which produce "sweet" natural gas. The East Texas production, with the exception of a single well, is gathered by Tristream Energy, LLC and processed at its Eustace Plant for separation of condensate, removal of impurities, and extraction of natural gas liquids and sulfur.
In South Texas, we operate ten productive wells with 100% working interest and 88% net revenue interest in the Jourdanton field in Atascosa County, Texas, which was discovered in 1945 by Humble Oil Company. Our net leasehold ownership in the field is 926 acres. Our production from the field is primarily from the Edwards carbonates (7,300 to 7,400 feet); however, production has been established in multiple reservoirs above the Edwards interval, predominately the Georgetown, Austin Chalk, and Buda formations. In addition, the Eagle Ford shale is productive in the southern portion of Atascosa County, but it has not been widely tested in the immediate vicinity of our wells.
Our Mississippi properties produce from the Smackover formation at depths of 16,500 feet to 17,200 feet, and our interests encompass approximately 800 gross and 790 net acres. We operate one productive oil well and one productive gas well.
This web page may include "forward-looking statements." All statements, other than statements of historical facts, included in this web page that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements and speak only as of the date on which such statement is made. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These include, but are not limited to, risks related to volatility of commodity prices; market demand for crude oil, natural gas and natural gas liquids; the effectiveness of the Partnership's hedging activities; the Partnership's ability to retain key customers; the Partnership's ability to continue to obtain new sources of crude oil and natural gas supply; the availability of local, intrastate and interstate transportation systems and other facilities to transport crude oil, natural gas and natural gas liquids; competition in the oil and gas industry; the Partnership's ability to obtain credit and access the capital markets; general economic conditions; and the effects of government regulations and policies. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Partnership's actual results and plans could differ materially from those implied or expressed by any forward-looking statements. The Partnership assumes no obligation to update any forward-looking statement as of any future date. For a detailed list of the Partnership's risk factors, please consult the Partnership's Form 10-K, filed with the Securities and Exchange Commission ("SEC") for the year ended December 31, 2013 and the Partnership's Forms 10-Q filed with the SEC for subsequent quarters, as well as any other public filings and press releases.