Goodrich Petroleum Considers Sale of Eagle Ford Assets

Company Slashes Capital Spending in 2015
Goodrich Petroleum Eagle Ford Map

Goodrich Eagle Ford Map | Click to Enlarge

Eagle Ford player Goodrich Petroleum is considering selling all or a portion of its Eagle Ford Shale acreage in the first half of 2015. In early December of 2014, the Houston, TX-based company announced its Board of Directors had authorized management to “explore strategic alternatives” for the assets.

Goodrich, which has invested significantly in the Tuscaloosa Marine Shale (TMS) in South Louisiana and Mississippi, also announced its capex budget for 2015 this month at $150-million – $200-million. That’s much less than the than $375-million budget the company projected in 2014, according to Goodrich’s annual report. Company officials indicate about 95% of Goodrich’s 2015 budget will be earmarked for drilling in the TMS.

Read more: Goodrich Increases 2014 Budget by 50% and is Shifting to Tuscaloosa Marine Shale

Since June of 2014, the price of oil has dropped by nearly 50%, and Goodrich’s pullback on capital investment is a strong indication of the impact of lower crude oil prices on shale oil operators. Company officials indicate a whole or partial sale of its Eagle Ford assets would significantly enhance the company’s flexibility to further expand its development activities under better market conditions.

Goodrich has approximately 45,000 (30,000 net) acres in the Eagle Ford, with an estimated 383 (255 net) un-risked drilling locations remaining, according to company officials. Goodrich entered the Eagle Ford early in 2010, paying approximately $1,650 per acre.

We’ll keep an eye out for any new details about Goodrich’s potential exit from the Eagle Ford. Stay abreast of all EagleFordShale.com updates by subscribing to our newsletter.

Read more at GoodRichPetroleum.com

Eagle Ford Shale Rig Count Increases by One to 261

Eagle Ford and Bakken Drilling Permits Fall by 30%
Eagle Ford Reaches One Billion Barrels

Eagle Ford Reaches One Billion Barrels

The Eagle Ford Shale rig count increased by one to 261 rigs running across our coverage area by the end of last week.

In recent Eagle Ford news, oil prices have plummeted 40% in the last six months, and that’s putting the kibosh on some new drilling across North American shale plays.

According to DrillingInfo.com, applications for new drilling permits in South Texas’ Eagle Ford Shale and North Dakota’s and Montana’s Bakken Shale fell approximately 30% in November of 2014 compared to the previous month. However, the Texas Railroad Commission reports a whopping 4,891 new drilling and re-enter permits in the Eagle Ford from Jan. – Oct. of this year, already surpassing the total for new drilling and re-enter permits in 2013 of 4,416.

Read more: Eagle Ford and Bakken Drilling Permits Fall 30%

The U.S. rig count decreased by 18 to 1,875 rigs running by the end of last week. A total of 338 rigs were targeting natural gas (down 8 from the previous week) and 1,536 were targeting oil in the U.S. (ten less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).  868 or ~48% of rigs active in the U.S. were running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (206 rigs). The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

The natural increased by two to 16 rigs running by the end of last week. Natural gas prices decreased by $.60 from the previous week at $3.14/mmbtu on Friday afternoon.

The oil rig count increased by three to 245 rigs running by the end of last week. WTI oil prices decreased by ~$200 from the previous week, trading at $55.98/bbl on Friday afternoon. Eagle Ford light crude traded at $53.00/bbl on December 19th.

A total of 247 rigs are drilling horizontal wells, six rigs are drilling directional wells, and eight rigs are drilling vertical wells. Karnes, Dimmit, and DeWitt each have at minimum 27 rigs running. Dimmit County has the highest rig count this week at 36. See the full list below in the Eagle Ford Shale Drilling by County below

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts – Every other Weekday or Weekly Email Alerts

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
DIMMIT 35 36 FAYETTE 3 3
KARNES 33 36 LEE 3 3
DE WITT 27 27 LEON 3 3
MCMULLEN 23 23 AUSTIN 2 2
LA SALLE 22 22 MAVERICK 2 2
WEBB 15 15 COLORADO 1 1
ATASCOSA 14 14 BEE 1 0
BRAZOS 12 12 DUVAL 1 0
BURLESON 11 12 GOLIAD 0 0
GONZALES 12 11 GRIMES 0 0
MADISON 11 10 MILAM 0 0
LAVACA 9 9 ROBERTSON 0 0
FRIO 7 7 WASHINGTON 0 0
LIVE OAK 7 7 WILSON 0 0
ZAVALA 6 6 BASTROP 0 0

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Alta Mesa Exits Eagle Ford Shale in $210 Million Deal

Sale Includes Non-Operated Acreage Primarily in Karnes County, TX to ReOil Eagle I, LLC

Houston, TX-based Alta Mesa Eagle, LLC, a subsidiary of Alta Mesa Holdings, LP, will soon exit the Eagle Ford Shale, agreeing to sell its remaining assets to ReOil Eagle I, LLC in a$210-million deal announced on Dec. 10, 2014.

ReOil will initially pay Alta Mesa $175-million, with an additional $25-million paid after the drilling of ten upper Eagle Ford Shale wells. ReOil Eagle I, LLC, has also agreed to pay an additional $10-million if the Calendar Year 2016 NYMEX strip closes above $80 per barrel for two consecutive months in 2015.

The properties included in the divestiture are primarily located in Karnes County, TX, and all are non-operated. At the end of 2013, Alta Mesa officials say the reserves associated with these properties were 7.3-million BOE, with 9% of the volumes classified as proved developed.

In March of 2014, Alta Mesa engaged in another large Eagle Ford Shale asset divestiture, selling 15,200 (800 net) acres in Karnes County to Houston, TX-based Memorial Production Partners for $173-million.

Read more: Memorial Production Partners Buys Eagle Ford Assets in $173-Million Deal

Alta Mesa’s most recent transaction has an effective date of September 1, 2014. The effect of this transaction on the company’s borrowing base is yet to be determined. The closing is expected in mid-January and subject to normal and customary closing conditions including approval of the transaction by Alta Mesa’s Board of Directors.

Read more at altamesa.net

Eagle Ford and Bakken Drilling Permits Fall 30%

Oil Prices Down 40% in the Past Six Months

Oil prices have plummeted 40% in the last six months, and that’s putting the kibosh on some new drilling across North American shale plays.

According to DrillingInfo.com, applications for new drilling permits in South Texas’ Eagle Ford Shale and North Dakota’s and Montana’s Bakken Shale fell approximately 30% in November of 2014 compared to the previous month. However, the Texas Railroad Commission reports a whopping 4,891 new drilling and re-enter permits in the Eagle Ford from Jan. – Oct. of this year, already surpassing the total for new drilling and re-enter permits in 2013 of 4,416.

The rig count in the Eagle Ford Shale has not dropped off yet, staying between roughly 260 – 270 rigs running across EagleFordShale.com’s 30-county coverage area per week since June of 2014. But on Friday, oilfield services giant Baker Hughes, which will soon be purchased by rival Halliburton, reported a sharp drop in the U.S. oil rig count, with a decrease of 29 rigs.

As prices fall, new drilling in some areas of the Eagle Ford will also fall, but as we’ve reported, the “sweet spot” areas of the play will continue humming with drilling rigs.

Read more: What Lower Oil Prices Mean for Texas and Eagle Ford

Where the pinch will be felt the most in the coming months is with oilfield services companies. At higher oil prices, service companies have benefitted from charging a premium for their services, but expect for many contracts to be renegotiated as operator’s look for ways to trim the fat, and focus more on efficiency.

Eagle Ford Shale Rig Count Decreases by One to 260

Eagle Ford Reaches 1-Billion Barrels Cumulative Liquids Production
Eagle Ford Reaches One Billion Barrels

Eagle Ford Reaches One Billion Barrels

The Eagle Ford Shale rig count decreased by one to 260 rigs running across our coverage area by the end of last week.

In recent Eagle Ford news, amidst falling crude prices and dire predictions about the future of the industry, Wood Mackenzie announced that Eagle Ford reached an impressive milestone in November as production topped one billion barrels. Over the past two years, production in the Eagle Ford play has exploded and elevated the area as a major force in the world energy market.

Read more: Eagle Ford Reaches One Billion Barrels of Crude

The U.S. rig count decreased by 27 to 1,893 rigs running by the end of last week. A total of 346 rigs were targeting natural gas (up 2 from the previous week) and 1,546 were targeting oil in the U.S. (29 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).  872 or ~48% of rigs active in the U.S. were running in Texas.

Baker Hughes rig count is quoted here. Baker Hughes also releases its own Eagle Ford Rig Count that covers the 14 core counties (204 rigs). The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

The natural gas rig stayed flat at 18 rigs running by the end of last week. Average rig counts for natural gas production in 2012 were around 80 and then dropped to around 40 in 2013. Natural gas prices stayed flat from the previous week at $3.74/mmbtu on Friday afternoon.

The oil rig count decreased by one to 242 rigs running by the end of last week. WTI oil prices decreased by ~$6.00 from the previous week, trading at $57.99/bbl on Friday afternoon. Eagle Ford light crude traded at $56.50/bbl on December 12th.

A total of 244 rigs are drilling horizontal wells, six rigs are drilling directional wells, and 10 rigs are drilling vertical wells. Karnes, Dimmit, and DeWitt each have at minimum 27 rigs running. Dimmit County has the highest rig count this week at 35. See the full list below in the Eagle Ford Shale Drilling by County below

South Texas Oil & Gas News:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts – Every other Weekday or Weekly Email Alerts

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
DIMMIT 35 35 FAYETTE 3 3
KARNES 35 33 LEE 3 3
DE WITT 27 27 LEON 3 3
MCMULLEN 21 23 AUSTIN 2 2
LA SALLE 24 22 MAVERICK 2 2
WEBB 15 15 BEE 1 1
ATASCOSA 15 14 COLORADO 2 1
BRAZOS 11 12 DUVAL 1 1
GONZALES 12 12 GOLIAD 0 0
BURLESON 12 11 GRIMES 0 0
MADISON 9 11 MILAM 0 0
LAVACA 9 9 ROBERTSON 0 0
FRIO 7 7 WASHINGTON 0 0
LIVE OAK 7 7 WILSON 0 0
ZAVALA 5 6 BASTROP 0 0

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Eagle Ford Reaches 1-Billion Barrels – Nov. 2014

WoodMac: $30.8-Billion in Eagle Ford Capex Spending in 2015

The Eagle Ford Shale is arguably the largest single economic event in Texas history, and in November, the play reached a milestone of 1-billion barrels produced, according to energy research consultancy Wood Mackenzie.

In the past seven years, the Eagle Ford Shale has drastically changed the landscape of South Texas in both positive and negative ways. Oil wealth has injected billions of dollars into the coffers of land owners with subsurface mineral rights, and Eagle Ford counties though an increase in ad valorem property taxes. However, damage to infrastructure (i.e. local county roads) and environmental concerns have also come with the territory as the Eagle Ford has been developed.

Overall, the Eagle Ford has been a positive force for economic growth in Texas, yielding an $87-billion economic impact in South Texas, and supporting more than 155,000 full-time jobs in 2013, according to the Univ. of Texas at San Antonio’s Institute for Economic Development.

Read more: UTSA: Eagle Ford Shale Economic Impact – $87 Billion

Eagle Ford Moving Forward in 2015

Despite a dip in oil prices, Wood Mackenzie reports the lion’s share of industry Lower 48 development capital will be in the Eagle Ford in 2015 at $30.8-billion. That’s almost double the amount companies plan to spend in the Bakken Shale, the country’s next most significant shale play. Expect much of that capital to be funneled into roughly 10% of the Eagle Ford Shale, which accounts for about 50% of the play’s total production.

Eagle Ford Facts at the 1-Billion Barrel Mark

  •  4 years of gasoline for every licensed driver in Texas from the Eagle Ford
  • More than 10,000 Eagle Ford wells have been completed
  • The Eagle Ford accounts for 16% of U.S. oil production
  • Drilling pipe used to date in the play would reach 1.25 times around the world
  • The Houston, TX Astrodome could be filled 6 times by the volume of proppant used in the Eagle Ford
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