Frackin’ gas rush: India’s largest company joins S TX energy play

Dippin' Dots: The completed and proposed wells in the Eagle Ford Shale.

Greg Harman
gharman@sacurrent.com

It’s been interesting to see the amount of terrifying and tantalizing natural-gas news that sandwiched our opening salvo about South Texas’ shale-fracturing natural-gas developments this week.

First came GASLAND, a scalding indictment (but is it honest?) of all things shale splitting. If that approach hangs too heavily on emotion for you, you can also dip your toes into a couple other “fracking” documentaries, including Haynesville (called “fairer and smarter” by some Cowtown columnist), and the apparent industry handjob, Gas Odyssey, which muscles its way onto the field with middle-school computer animation and very simple sentences. [Imagine treehuggers are keeping you from a shower of gold doubloons. Okay. That's simplistic review of the review.]

So far, South Texas has received its shower uninterrupted by any significant public debate on the potential impact on our groundwater. We’ve seen many of the majors buying up tracks to drill this year, including BP and Shell.

Announced Thursday, India’s largest company has joined Irving-based Pioneer Natural Resources in the fray at a hefty admission price of a $1.3 billion.

Reports Bloomberg reporter Rakteem Katakey:

Reliance may have paid more than double the rate BP paid for similar assets in the Eagle Ford area, according to Sanford C. Bernstein Ltd. “Our big concern is that Reliance is coming in fairly late in the game,” said Neil Beveridge, an analyst at Bernstein in Hong Kong. “Prices are considerably higher now, and Reliance is paying a premium.”

Reliance is paying $11,100 per acre, compared with $4,000 paid by BP in a March deal, according to calculations by Beveridge.

…

The venture will drill at least 20 wells this year, 70 wells in 2011, 120 in 2012 and 140 wells in 2013, he said.

For you city dwellers, I am assured San Antonio Water System's expected back-up water-well field is safely out of the way for now. But if you outliers are entertaining offers, you may want to think about the value of your water. It’s likely these frackers are gonna need quite a bit.

At least, that’s the EPA estimate.