The Eagle Ford play in southeast Texas presents local refineries with the opportunity to get crude oil at lower costs than using imported oil. Refineries that rely on imported Brent oil pay a premium over what Midwest American refineries pay, so getting more cheap oil from domestic sources can boost profitability.

Reuters reports that production in the area is accelerating, averaging 272,000 barrels per day in June from 70,000 in April, according to data supplied by energy consultancy Bentek. Market experts have predicted that this production could surpass 400,000 barrels per day by 2013.

All that new Texas supply, and the short distance it would travel to get to a refinery, will lower the expenses associated with producing and transporting the crude for local refineries, Reuters reports.

Once new pipelines get built from Cushing Oklahoma down to Texas, Texas refineries will also be able to access the cheaper crude supplies in Canada and North Dakota—increasing cost savings.

The Eagle Ford shale resides in South Texas and contains natural resources that range between 4,000 and 14,000 feet below ground. Oil production in the play has been prioritized as abundant shale deposits existing in North America have driven down natural gas prices.  

The Eagle Ford play in southeast Texas presents local refineries with the opportunity to get crude oil at lower costs than using imported oil. Refineries that rely on imported Brent oil pay a premium over what Midwest American refineries pay, so getting more cheap oil from domestic sources can boost profitability.

Reuters reports that production in the area is accelerating, averaging 272,000 barrels per day in June from 70,000 in April, according to data supplied by energy consultancy Bentek. Market experts have predicted that this production could surpass 400,000 barrels per day by 2013.

All that new Texas supply, and the short distance it would travel to get to a refinery, will lower the expenses associated with producing and transporting the crude for local refineries, Reuters reports.

Once new pipelines get built from Cushing Oklahoma down to Texas, Texas refineries will also be able to access the cheaper crude supplies in Canada and North Dakota—increasing cost savings.

The Eagle Ford shale resides in South Texas and contains natural resources that range between 4,000 and 14,000 feet below ground. Oil production in the play has been prioritized as abundant shale deposits existing in North America have driven down natural gas prices.  

Canadian brokerage firm Canaccord Genuity announced on October 6 that it was reiterating its SPECULATIVE BUY rating for junior oil and gas company Hyperion Exploration (HYX:TSXV) and increasing its target share price to C$2.25. The target price is based on a 5.5 times multiple of 2012 EV/DACF and the rating is based on the company's average quarterly production, which is below 1,000 barrels per day.

The junior oil and gas company released an update on its operations that indicated its wells drilled in the Cardium Formation in Alberta, Canada, are providing rather promising results. Hyperion has $24 million in credit it can put towards its 2011 capital expenditures and has reaffirmed its 2011 production estimate of 950 barrels of oil equivalent per day.

At the time of report, Hyperion was trading at a 1.9 times multiple of EV/DACF and a valuation of $27,650 per barrel of oil equivalent per day, based on Canaccord's revised 2012 estimates, which is lower than its peers.

Hyperion Exploration closed at closed at C$0.71 on October 6 and hit a 52-week high/low C$2.40 and C$0.47, respectively.
 

Ohio state geologists estimate the size of the Utica shale in just their state could be one third of Alaska’s Prudhoe Bay, one of the largest domestic oil supplies in the last 40 years.

The oil and natural gas contained in Utica have already attracted capital from several companies, which include Chesapeake Energy, the world's leading shale-gas producer, AOL Energy reports.

Ohio state geologists have estimated that the portion of the play that exists in the state could hold up to 5.5 billion barrels of oil and as much as 15 trillion cubic feet of natural gas, according to the media outlet. The oil resources provided in this estimate amount to a third of the production of Alaska's Prudhoe Bay, which is the country's biggest oil reserve. The amount of natural gas provided by the Ohio state estimate would make the Utica play a significant component of U.S. supplies of the fuel.

Several industry insiders as well as the United States Geological Survey have estimated the total resources included in the play. Aubrey McClendon, Chief Executive of Chesapeake Energy Corporation, told a crowd at Governor John Kasich's energy summit that the play could potentially be worth $500 billion.  

Wunderlich Securities revised its estimates for Master Limited Partnership (MLP) Spectra Energy Partners, LP (SEP:NYSE) on October 5. The largest changes pertain to the impact that the Big Sandy acquisition will have on EBITDA.

Wunderlich has revised its estimate for the impact of the Big Sandy acquisition on earnings. The MLP expects that the acquisition will not make a significant alteration to the 2011 cash available for distribution. In 2012, the acquisition should add roughly $35 million to EBITDA. This estimate includes new contract revenues that will contribute $8.5 million per year starting January 1, 2012.

Wunderlich announced that it is lowering Spectra's 2011 EBITDA prediction to C$246 million from C$263 million and raising its EBITDA estimate for 2012 to C$283 million from C$280 million. The MLP's estimated 2011 discounted cash flow (DCF) is being reduced to C$212 million from C$226 million and their 2012 DCF is being raised to $244 million from $235 million.

Spectra Energy Partners, LP opened at C$28.39 on October 5 and hit a 52-week high/low of C$36.31 and C$25.53, respectively.