Eagle Ford Shale Regional Rig Count at 271 on August 10, 2012

Chesapeake Plans to drop to 22 rigs running in 2013, which is down from a peak of 35
Chesapeake Eagle Ford Rig Map

Chesapeake Rig Map | Click to Enlarge

The Eagle Ford Shale drilling rig count grew to 271 this past week. News this week built on what we heard last week when several operators discussed drilling efficiencies and dropping rigs in response. Chesapeake highlighted its success in lowering well costs by 15% through drilling time improvements and other oilfield service costs. The company also plans to drop from almost 33 rigs running in the first half of the year to 25 at year-end and 22 for 2013. The company is also working off a backlog of 220 wells that have been drilled, but have not been brought to production.

Read our coverage of Chesapeake’s quarterly release in the article Chesapeake Will Run 22 Eagle Ford Rigs in 2013.

Eagle Ford Oil & Gas Rigs

The number of natural gas rigs (Smithbits) stands at 59 this week, up one from last week. For the eighth week running, the only counties with over ten rigs targeting natural gas are Karnes and Webb. There are 210 oil rigs working, which ties the record set in April 27th.

Henry Hub futures were trading at ~$2.78 on Friday afternoon. That’s a drop of almost 10% over the past three weeks. Notably, spot prices (physical prices today) are off, but still closer to $3 at $2.96 per mmbtu.

WTI was trading at ~$93/bbl Friday afternoon and LLS crude prices are just above $110/bbl. As I’ve mentioned several times before, if prices continue to rise we’ll likely see additional drilling capital committed to the area.

There are 247 horizontal rigs running in the region. The three counties leading development are Karnes with 36 rigs, McMullen with 32 and La Salle with 31. Dimmit (29), Webb (20), DeWitt (19), Gonzales (17), Atascosa (12), Live Oak (11), and Frio (10) round out the top Eagle Ford counties.

News items this week included:

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Drilling Rig Count by Operator

Operator Name Prior Week Current Week
Chesapeake 28 27
Petrohawk (BHP) 24 25
EOG Resources 20 21
Marathon Oil (Hilcorp) 23 21
ConocoPhillips 11 13
Pioneer Natural 11 12
Anadarko 10 10
Murphy Oil 10 10
Talisman Energy (Statoil) 9 9
Plains Exploration 8 8
Lewis Petroleum 8 7
SM Energy 7 7
Shell 6 6
Hunt Oil 3 5
Rosetta Energy 5 5
Swift Energy 5 5
El Paso Energy 4 4
Blackbrush O&G 3 3
Cabot Oil & Gas 3 3
Carrizo Oil & Gas 3 3
Dan Hughes 3 3
All Others 64 64
Total 268 271

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 37 36 GRIMES 3 3
MCMULLEN 34 32 LEON 3 3
LA SALLE 31 31 BEE 2 2
DIMMIT 31 29 BRAZOS 3 2
WEBB 22 20 BURLESON 2 2
DEWITT 16 19 DUVAL 2 2
GONZALES 15 17 MAVERICK 2 2
ATASCOSA 12 12 ROBERTSON 3 2
LIVE OAK 11 11 Washington 2 2
FRIO 9 10 AUSTIN 1 1
MADISON 9 9 LEE 0 1
WILSON 4 7 BASTROP 0 0
LAVACA 5 6 COLORADO 0 0
FAYETTE 4 5 GOLIAD 0 0
ZAVALA 5 5 MILAM 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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