Eagle Ford Drilling is Resisting $2 Gas – January 20th, 2012

Drilling Rig PhotoThe Eagle Ford Shale drilling rig count moved up 2 this past week. The rig count was relatively flat again week over week. Rigs targeting natural gas continue to be the only threat to the region. At current price levels, we’re getting close to operational costs for wells and that means tough decisions will have to be made in regards to shutting in lower volume (high cost) wells.

Natural gas prices are approaching ten-year lows at ~$2.30 / mmbtu. With that, we still added 5 gas rigs this week. Those units are likely targeting portions of the play with a rich condensate and NGL stream. We dropped 3 oil rigs, but prices held flat at $98/bbl through most of the week. Horizontal wells account for activity from 245 rigs drilling and we have 0 injection or service wells being drilled.

Karnes County expanded its lead in drilling this week with 43 rigs. Webb (40), La Salle (33), DeWitt (26), McMullen (24), Gonzales (21), and Dimmit (19) are the most active counties. Frio County did jump to 10 active rigs this week to round out the counties with double digit rig counts.

News in the Eagle Ford included:

Jeff Venghaus, from Jones Lang LaSalle, contributed an article addressing Eagle Ford Industrial Real Estate. If you are making plans to expand or grow your business, be sure to read his post at our Eagle Ford Blog.

Don’t forget our blog platform is open. If you have professional experience in the Eagle Ford and would like to be considered as a contributor, please Contact Us about guest blogging.

Come back weekly for updates on the South Texas drilling rig count. Better yet, Email Subscribe Link]

Drilling Rig Count by Operator


Operator Name Prior Week Current Week
Chesapeake 31 30
EOG Resources 27 27
ConocoPhillips 17 17
Petrohawk (BHP) 14 16
Marathon Oil (Hilcorp) 13 13
Lewis Petroleum 12 12
Pioneer Natural 12 11
Talisman 10 10
Anadarko 10 9
Exxon (XTO) 8 8
All Others 109 112
Total 263 265

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 SmithBits 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 and/or Smith Service Co’s (Schlumberger) Smith Rig Count.

Drilling Rigs by County

Texas County Prior Week Current Week Texas County Prior Week Current Week
KARNES 40 43 BEE 2 2
WEBB 39 40 BRAZOS 0 2
LA SALLE 32 33 LAVACA 2 2
DEWITT 27 26 MAVERICK 2 2
MCMULLEN 25 24 BURLESON 2 1
GONZALES 23 21 FAYETTE 1 1
DIMMIT 20 19 GRIMES 1 1
FRIO 9 10 LEE 1 1
LEON 9 8 MILAM 0 1
ATASCOSA 5 6 Washington 1 1
LIVE OAK 5 5 AUSTIN 0 0
ROBERTSON 6 5 BASTROP 0 0
MADISON 4 4 COLORADO 0 0
ZAVALA 4 4 DUVAL 0 0
WILSON 3 3 GOLIAD 0 0
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R.T. Dukes

R.T. Dukes

Managing Editor at EagleFordShale.com
R.T. is the managing editor of EagleFordShale.com. In prior roles, he advised major oil companies on strategy, the macro business environment, and opportunity screening. 2503 Robinhood, Houston, TX, 77005, U.S.A. | Telephone: 832.429.4790

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